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StrongPoint

Earnings Release Feb 12, 2020

3767_rns_2020-02-12_a7eb169a-b83b-4a5d-a316-e1a3cbf9c748.pdf

Earnings Release

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Q4 and year 2019

Financial report and status

Together with colleagues in the StrongPoint team, I recently visited the NRF 2020 Big Show in New York, one of the most important retail shows on the planet. During busy days, we reinforced our partnerships with leading business and technology partners and received solid feedback on our solutions offering. The NRF conference also confirmed the 2025 growth strategy that StrongPoint has developed over the latest busy months, presented for the first time at our Strategy Update Session in Oslo on February 12th.

In short, StrongPoint targets to be retailers' trusted in-store technology and e-commerce partner. We will drive productivity for retailers through our leading portfolio of technology solutions and highly valued service and support offering.

In e-commerce, StrongPoint is offering a complete solution for managing and optimizing the entire flow of online orders from planning and picking to last mile delivery.

In-store, StrongPoint's offering improves consumers' shopping experience from their first pick to check-out, and at the same time increasing retailers' productivity through automated, integrated, secure and cost-saving solutions. From stockroom to check-out.

Combined, StrongPoint's e-commerce and in-store solutions and services are perfectly positioned at the crossroads of multi-channel retailing: online growth and cost-cutting in offline retail. From a North European and grocery focused starting point, StrongPoint will pursue a three-step approach to geographical expansion and growth:

• Roll-out of the full portfolio of current solutions in key markets, including Norway, Sweden, the Baltics and Spain, utilizing our strong sales, service and support organization and model, applying innovative tools and sharing of best practices.

• Roll-out of proprietary

technology solutions in selected new markets, including US, Netherlands, Italy and Greece, through strong local presence, service and support, targeting the largest cost-buckets in offline and online grocery retail with existing and new solutions.

• Utilizing our market access platform for global retail technology providers targeting leading retailers in StrongPoint's key markets, leveraging our strong market- and one-stop-shop position.

In Q4 2019 we continued delivering on the pillars described above, and experienced a 12 % revenue growth in Retail Technology vs. same quarter last year. Our e-commerce revenue contribution grew even stronger with more than 40 % growth. However, the overall revenue development was slightly down as revenue from Cash Security was reduced from the exceptional quarter last year. EBITDA for the quarter improved to MNOK 30.6, up from MNOK 22.5 last year (IFRS effect in 2019 constituted of MNOK 6.3).

Looking back at 2019 I am pleased with a 12 % organic growth in Retail Technology and the profitability improvement. In particular when considering the many changes, we have undertaken with regards to conversion of formerly own offices into partner locations and resources leveraged to craft our strategy forward.

I look forward to the journey ahead. We are just getting started. We will help retailers to stand out, sustain growth and spur productivity - leveraging the arising opportunities within e-commerce and in-store technology.

2

Jacob Tveraabak CEO of StrongPoint

Continued strong performance in Retail Technology

● Operating revenues: MNOK 299, -3 % decline vs Q4 2018. 12 % growth in Retail Technology

  • Strong e-commerce growth with 42 % compared to same quarter last year
  • EBITDA: MNOK 30.61) (22.5), with MNOK 21.9 (11.1) EBITDA in Retail Technology
  • Cash flow from operational activities: MNOK 23.3 (20.5)

Several customer breakthroughs and deliveries

  • Contract to deliver 20 Click & Collect lockers to COOP Sweden in 2020
  • First pilot for Mobile Grocery Click & Collect lockers with Axfood in Sweden
  • First implementation of e-commerce Pick & Collect system to a Spanish customer
  • Signed order with partner Bullion IT for delivery of 500 CashGuard Premium units to First National Bank in South Africa
  • Delivery of 885 CIT-cases to Sberbank, Russia, during the quarter

Important product development

  • Finalisation of beta version of Pick & Collect software (project E20)
  • Completion of integrated Self-Checkout solution with Harting Systems' checkout zone
  • Launch of Click & Collect lockers on wheels (mobile lockers)

The Board will propose a dividend of NOK 0.60 per share, up from NOK 0.55 last year

1) IFRS 16 had a positive effect on the EBITDA of MNOK 6.3 in Q4 2019 and MNOK 23.4 YTD 2019.

CEO statement

We shop like never before. Both online and offline and everything in between. With delivery home, in-store or wherever we are. Around the clock. Combined with an ever-increasing competition and accelerating awareness among both retailers and consumers of consumption's environmental and social impact, global retailers are facing their biggest challenge ever: To stand out, sustain growth, and spur productivity.

Key figures (MNOK)
Q4 Year
2019 2018 2019 2018
Operating revenue 299.0 307.9 1.111.7 1 067.7
EBITDA 30,6* 22.5 98,2* 67.5
EBITDA margin 10.2 % 7.3 % 8.8 % 6.3 %
Operating profit (EBIT) 17.5 12.3 45.4 29.9
Ordinary profit before tax (EBT) 13.7 5.9 43.1 26.0
Cash flow from operational activities 23.3* 20.5 80,6* 21.4
Disposable funds 74.2 87.0 74.2 87.0
Earnings per outstanding shares (NOK) 0.19 -0.05 0.72 0.30
Earnings per share adjusted (NOK) ** 0.25 0.05 1.03 0.73

*) IFRS 16 amounts to MNOK 6.3 in Q4 2019 and MNOK 23.4 YTD 2019. **) Earnings per share, adjusted for depreciation of intangible assets, mainly from M&A.

Key figures (MNOK)

Revenue Q4 Year
MNOK 2019 2018 2019 2018
Retail Technology 218,2 195,6 843,5 755,6
Cash Security 46,8 74,0 123,5 152,0
Labels 38,6 39,4 163,8 165,6
Elim / ASA -4,5 -1,0 -19,1 -5,5
Total 299,0 307,9 1 111,7 1 067,7

StrongPoint Group

The StrongPoint Group delivers solutions that streamline store operations, enable e-commerce, and simplify the shopping experience through the business area Retail Technology. StrongPoint is represented in key markets by its own organization and sells its products and solutions to the other selected markets through a network of partners.

The Group also consists of the business areas Cash Security, which is a leading supplier of IBNS (Intelligent Banknote Neutralization Systems) in the European market, and Labels, which is a leading supplier of adhesive labels in Norway and Sweden.

StrongPoint Group

350

Continued strong performance in Retail Technology in Q4

Total revenue in Q4 2019 decreased by 3 % vs. same quarter last year and ended at MNOK 299. This almost flat development constitutes of very different performance in two of StrongPoint's business areas. Retail Technology, the focus area for StrongPoint, increased its revenue by 12 % in this quarter compared to last year. E-commerce grew by 42 % in the quarter compared to Q4 2018, driven by strong performance in picking (Pick & Collect) and delivery (Click & Collect) solutions.

Cash Security delivered 100 % of the 885 Cash InTransit (CIT) - cases to Sberbank in Russia during the quarter. The revenue decreased by 37 % compared to fourth quarter last year, due to the exceptional situation with delivery of two parallel large orders in the same quarter in 2018.

Labels experienced a small decline compared to Q4 2018, due to some lower demand from customers

EBITDA for the group was MNOK 30.6 (22.5) in Q4, of which the IFRS 16 effect was MNOK 6.3. Cost savings program initiated at the end of 2018 had a positive effect on EBITDA in the quarter, in addition to lower warranty costs in Cash Security. Some of this cost saving has been reinvested in priority growth areas such as e-commerce and growing our presence in Spain.

200 250 300 350 The partnership with Harting Systems is progressing in line with plans. The customer offering combines StrongPoints' Self-Checkout solution and Harting Systems' checkout zone. The integrated solution will also be showcased at Euroshop. The primary market for the solution is Germany, where Harting Systems has a strong foothold with grocery retailers.

50 100 150 Click & Collect lockers on wheels (mobile lockers) were launched and received immediately interest in the market. The solution enables retailers to try out a Click & Collect solution in different locations, typically without additional permits from the authorities.

50 100 150 200 250 300 2017 2018 2019 200 400 1000 2017 2018 2019

60 80 100 120 Full year revenue in Retail Technology grew organically by 12 % from 2018 to 2019, from MNOK 756 to 844. Norway and the Baltics had growth rate of 4 % and 34 % respectively and covered well up for the non-repetitive Alimerka lease buyout in 2018. E-commerce delivered an overall growth of 34 % year-on-year. 200 250 300

2017 2018 2019 20 40 2017 2018 2019 The Spanish operation has increased the targeted market to also include non-grocery segments and initiated the rental solution as a new concept. Within Retail Technology, major restructuring has been done in France, Belgium, Germany and Russia by converting them to partner offices. 2017 2018 2019 50 100 4kv. 4kv. 4kv.

The cost savings initiative of MNOK 30 was delivered in full during the year. The Retail Technology business area has invested part of the savings in product development (mostly "E20", Cash Management and Self-Checkout solution), and the Group is recruiting new resources to support future business plans. Cash Security experienced a decline of 19 % in yearly revenue, but the profitability was improved by MNOK 7, adjusted for IFRS. Main drivers for the increased result was improvement in quality.

Several customer breakthroughs and deliveries

Retailers are continuing to sign up to StrongPoint's e-commerce solutions, and especially Click & Collect in Q4 2019.

Delivery of Cash Management through the rental solution in Spain (Easy Access) affected both revenue and EBITDA in the quarter. Financial figures will continue to be influenced by the mix of paid and rental solutions going forward. The profit & loss statement will show lower revenue compared to traditional sales, and the working capital will increase as the rented solutions currently are financed by equity. 350

Based on feedback from the pilot solution "COOP Hämtas", the Swedish grocery retailer ordered 20 lockers to be installed in 20 different stores. The lockers will be delivered during the first half of 2020. In addition, the retailer Axfood has ordered 4 pilots of the StrongPoint Mobile Grocery Click & Collect locker.

Bullion IT, StrongPoint's partner in South Africa, ordered 500 CashGuard Premium units to be installed in bank facilities to First National Bank in the country.

Important product development

Throughout 2019 we have invested in a new Pick & Collect software solution, called the E20 project. A beta-version of the new platform is now completed. The solution will be a true SaaS solution, more scalable and with incorporated AI features. The beta version will be launched at Euroshop in February 2020.

*) IFRS 16 had a positive effect on EBITDA of MNOK 6.3 in Q4 2019 and MNOK 23.4 YTD 2019.

EBITDA Q4 Year
MNOK 2019 2018 2019 2018
Retail Technology 21,9 11,1 96,3 68,4
Cash Security 11,3 15,2 13,5 2,9
Labels 5,8 5,5 21,9 22,9
Elim / ASA -8,4 -9,3 -33,4 -26,8
Total 30,6 22,5 98,2 67,5

1200

Business areas

StrongPoint develops and sells technology solutions that streamlines and simplifies e-commerce and store operations. The company is also a leader in IBNS solutions for Cash In Transit (Cash Security), and Labels for customers in Norway and Sweden.

E-commerce

Picking Pick & Collect

Delivery

QueueManager DeliveryManager RouteManager Click & Collect

In-store

In-Store Productivity

Loss Prevention

ShopFlow Logistics

Electronic Shelf Labels Scales & Wrapping Systems

Task & Labour Management Voice Communication System

Payment Solutions Cash Management

Check Out Efficiency

Self-Checkout Self-Scanning Tobacco Sales Automation

Norway

Norway continued the positive trend and increased revenue by 4 % in Q4 compared to same quarter last year. Main drivers were deliveries of ESL, Vensafe and service. One large retailer has used StrongPoint competence and resources to rebuild the POS-area in more than 200 stores, leading to higher service revenue in the quarter. The project will continue in Q1 2020.

Sweden

Revenue grew with 37 % in the quarter compared to last year. ESL deliveries continued as previous quarters, and e-commerce continues to be more relevant to customers. Coop signed an agreement to buy 20 Click & Collect lockers for delivery in 2020. The solution will be a major part of the grocery chain's "Hämta-concept". Axfood signed an agreement to buy 4 pilots of Mobile Grocery Click & Collect to test customer behaviour related to this innovative solution.

Baltics

The Baltic countries delivered yet another strong quarter with a growth rate of 34 %, and are increasing its relative share of the Retail Technology revenue. This is the sixth consecutive quarter with year over year growth in revenue. Year-on-year comparison ended with a growth rate of 51 %. Good underlying operations and several large deliveries, especially within Self-Checkout solutions and ERP/POS projects are contributing to the growth. The Baltic sales team has achieved several pilots for different solutions, like ESL, complete Self- Checkout with cash and age verification (Vensafe +Yoti), Self-Scanning with Datema solution, and launched e-commerce picking to Rimi.

EMEA/Partners

The revenue from RoadRunners in Q4 2018 was presented as extraordinary and influence the comparison for Q4 2019. Spain delivered good sales growth and develops according to plan. In addition, more than 80 units were rented out this quarter, leading to increased recurring revenue going forward. In total almost 300 systems have been installed as rental solutions in 2019. If the units were sold the revenue would be approx. MNOK 22 higher for the year.

Partner Bullion IT ordered 500 units of CashGuard to be installed in the bank facilities of First National Bank in South Africa. The order is expected to be delivered during first half of 2020. Bullion IT doubled the installation of CashGuards from 2018 to 2019.

During 2019, restructuring has been done in Malaysia, France, Belgium and Germany. The conversion of own offices into Partner offices has led to a revenue decline, however the profitability for StrongPoint has improved as there was no direct cost of sales.

The first implementation of e-commerce Pick & Collect solution was completed for the Spanish retailer Plusfresc.

The yearly comparison vs last year was also influenced by the sale of the Cash Management as a Service contract to Alimerka which resulted in a one-off payment of MNOK 36.0 with an EBITDA effect of 21.3 in Q2 2018.

E-commerce

E-commerce had a growth of 42 % in the quarter driven by Click & Collect and Pick & Collect solutions. The growth during 2019 were 34 % vs 2018. The solution represented 5 % of total revenue for the full year. StrongPoint experience great interest in the market. All the major retail grocery chains in Sweden have already implemented e-commerce solutions. Further, both grocery and non-grocery retailers across Europe are evaluating different solutions for picking and delivery from StrongPoint.

Retail Technology

StrongPoint develops and sells technology solutions that streamline store operations, enable e-commerce, and simplify the shopping experience. The Group delivers proprietary solutions within In-store Productivity, E-commerce, Payment Solutions and Check Out Efficiency, as well as tailor-made retail solutions from leading third-party suppliers, including electronic shelf labels (ESL), POS, ERP, consulting services, scales and wrapping machines.

1) Alimerka decided to purchase the rented CashGuards in Q2 2018, which gave a one-off effect of 36 MNOK on revenue and 21.3 MNOK on EBITDA.

2) IFRS 16 had a positive effect on the EBITDA of MNOK 3.6 in Q4 2019 and MNOK 14.3 YTD 2019.

Q4 Year
MNOK 2019 2018 2019 2018
Product Sales 140,8 119,5 547,8 478,6
Service 77,4 76,1 295,7 277,0
Revenue 218,2 195,6 843,5 755,6
EBITDA 21,9 11,1 96,3 68,4
EBITDA-margin 10,0 % 5,7 % 11,4 % 9,1 %
EBT 15,6 24,2 66,1 64,2
Q4 Year
MNOK 2019 2018 2019 2018
Product Sales 46,3 19,5 145,8 133,0
Service 26,4 33,7 106,5 108,7
Revenue 72,7 53,2 252,3 241,7
Q4 Year
MNOK 2019 2018 2019 2018
Product Sales 45,0 48,5 176,2 133,2
Service 31,2 25,0 109,2 94,0
Revenue 76,2 73,5 285,4 227,2

Retail Technology delivered yet another strong quarter with an organic growth of 12 % compared to last year and continues the growth rate from previous quarters. All key markets experience growth in the quarter.

EBITDA in Q4 increased to 21.9 (11.1). This was a result of higher revenues and margin improvements in combination with the cost reduction initiatives implemented last year. At the same time, we continue to invest in strategically important growth areas like e-commerce software and sales resources in Spain. IFRS 16 effects were MNOK 3.6 for Retail Technology.

Q4 Year
MNOK 2019 2018 2019 2018
Product Sales 18,7 29,4 118,1 151,1
Service 6,0 6,2 25,2 27,7
Revenue 24,7 35,6 143,3 178,9
Q4 Year
MNOK 2019 2018 2019 2018
Product Sales 30,9 22,0 107,7 61,2
Service 13,7 11,2 54,8 46,5
Revenue 44,6 33,2 162,5 107,7
vith efficient work processes, new technolog

Cash Security

Cash Security offers solutions for Cash In Transit (CIT). The business area focuses on innovative IBNS (Intelligent Banknote Neutralisation System) technology, which protects cash without the need for weapons or costly armored vehicles.

The Cash Security revenue and profit are affected by few but large orders, which often leads to significant variations in quarterly and year-on-year comparisons. The previously reported order from Sberbank of 885 CITcases were delivered in full in Q4 2019. Sberbank is the largest bank in Russia with 14 000 branches in 83 regions.

In addition, the business area delivered the first 100+ CIT-cases to Prosegur in Germany. This is a new customer for StrongPoint.

The full year EBITDA increased with MNOK 10.6 compared to last year. 2018 was highly influenced by warranty issues and related cost that has not occurred in 2019. The business area focusses continuously on

quality and improvements.

The earlier announced LEAN project, that was initiated to better align our cost base with activity levels, is now under implementation. A new and expected more productive assembly line is up and running, and contributes partly to the improved profitability already in Q4. We expect a bottom-line impact of at least MNOK 5 p.a. from this initiative as of year-end 2020, stemming from improved productivity, cost effects in procurement, and lower quality costs.

The business area has its own sales and service organization in Sweden, Russia, France, Belgium and Norway, as well as partners in several countries, including Italy, Bosnia, Croatia, Serbia and the UK.

Cash Security

*) IFRS 16 had a positive effect on the EBITDA of MNOK 1.3 in Q4 2019 and MNOK 3.9 YTD 2019.

Labels

Labels has leading expertise in the design and production of adhesive labels. The business area is well adapted to today's market situation with efficient work processes, new technology and modern facilities.

Labels

Operating revenue in Q4 2019 decreased by 2 % compared to last year. Lower demand in general in both the Norwegian and Swedish market are the main drivers for the decline. Margin pressure in a highly competitive market led to reduced margins when adjusted for the IFRS effect.

StrongPoint has accepted an initial offer for compensation from BaneNor of MNOK 55.6 to relocate from its label facility in Norway. The railway construction work was estimated to start 2020/2021. However, BaneNor has communicated a delay to 2021/2022. The compensation fee and time of payment is subject to BaneNor's Board approval and the finalization of the agreement between the parties.

The business area is among the largest suppliers of adhesive labels in the Swedish and Norwegian markets. Labels uses FSC-certified material from EU/ EEA/UK in its label production to ensure that the paper is produced in a sustainable manner, and that the production meets the regulations for health and safety in the EU. The label factory in Sweden was certified according to ISO 9001 and ISO 14001 in December 2019. There will be a continued focus on further streamlining and digitalization of production and administrative processes.

*) The transition to IFRS 16 had a positive effect on the EBITDA of MNOK 1.3 in Q4 2019 and MNOK 5.0 YTD 2019.

Q4 Year
MNOK 2019 2018 2019 2018
Product Sales 36,2 59,4 87,9 105,7
Service 10,5 14,6 35,6 46,3
Revenue 46,8 74,0 123,5 152,0
EBITDA 11,3 15,2 13,5 2,9
EBITDA-margin 24,2 % 20,6 % 10,9 % 1,9 %
EBT 9,0 13,9 7,8 0,8
Q4 Year
MNOK 2019 2018 2019 2018
Revenue 38,6 39,4 163,8 165,6
EBITDA 5,8 5,5 21,9 22,9
EBITDA-margin 14,9 % 13,9 % 13,4 % 13,9 %
EBT 1,6 2,0 4,2 9,0

The Board and group CEO have today reviewed and approved StrongPoint's financial statements for the fourth quarter and the year 2019, including comparative consolidated figures for the fourth quarter and the year 2018. This report has been prepared in accordance with IAS 34 on interim financial reporting as determined by the European Union, and with supplementary requirements pursuant to the Norwegian Securities Trading Act. The Board and CEO hereby declare, to the best of their knowledge, that the financial statements for the fourth quarter and year 2019 have been prepared in accordance with prevailing accounting principles and that the information in the financial statements gives a true and fair view of the assets, liabilities, financial position and profit of the group taken as a whole at 31 December 2019 and 31 December 2018. To the best of their knowledge, the report gives a true and fair overview of important events during the accounting period and the impact of these events on the financial statements.

Morthen Johannessen Chairman

Klaus de Vibe Director

Camilla AC Tepfers Director

The Board of Directors of StrongPoint ASA

Rælingen 11 February 2020

Inger Johanne Solhaug Director

Peter Wirén Director

Jacob Tveraabak CEO

Accounting
year
General
assembley
Dividend
per share
2019 29.04.2020 Proposed 0,60
2018 26.04.2019 0,55
2017 24.04.2018 0,50
2016 20.04.2017 0,50
2016 05.01.2017 Extraordinary 1,00
2015 28.04.2016 0,45
2014 30.04.2015 0,35
2013 25.04.2014 0,30
2012 26.04.2013 0,25
2011 08.05.2012 0,25

Cash flow and equity

Cash flow from operational activities in the fourth quarter was MNOK 23.3 (20.5). For 2019, cash flow from operational activities was MNOK 80.6 (21.4) in 2019, including IFRS effect of MNOK 22. Positive changes in working capital and profitability, are the main reasons for the positive change in cash flow. Disposable funds were MNOK 74.2 per December 31, 2019. The net interestbearing debt decreased by MNOK 9.4 compared with the end of the last quarter and totalled MNOK 102.8, including the effects from IFRS 16. The transition to IFRS 16 increased our debt with MNOK 59.8, see note 5 for more information. A dividend of NOK 0.55 per share was paid in May 2019. The Group's holding of own shares amounted to 172,416, which represents 0.4 per cent of the outstanding shares. The Group has shareholder programs for the board of directors, the Group executive management and the employees. Through these programs a total of 89,706 shares have been subscribed in 2019. The Board will at the Annual General Assembly propose a dividend of NOK 0.60 per share, that when approved will be paid in May 2020.

StrongPoint | Q4 and year 2019

KNOK Q4 2019 Q4 2018 Chg. % Year 2019 Year 2018 Chg. %
Operating revenue 299 013 307 935 -2,9 % 1 111 767 1 067 468 4,1 %
Profit from AC, Service companies 6 -23 -71 215
Cost of goods sold 157 603 162 152 -2,8 % 579 457 534 661 8,4 %
Payroll 85 508 87 322 -2,1 % 324 092 331 908 -2,4 %
Other operating expenses 25 299 35 956 -29,6 % 109 927 133 658 -17,8 %
Total operating expenses 268 409 285 429 -6,0 % 1 013 477 1 000 227 1,3 %
EBITDA 30 609 22 483 36,1 % 98 219 67 457 45,6 %
Depreciation tangible assets 4 577 5 844 -21,7 % 16 980 18 531 -8,4 %
Depreciation leasing IFRS 16 5 969 - 0,0 % 22 156 - 0,0 %
Depreciation intangible assets 2 590 4 313 -39,9 % 13 700 19 056 -28,1 %
EBIT 17 473 12 326 41,8 % 45 383 29 870 51,9 %
Interest expenses 412 1 080 -61,9 % 2 353 3 129 -24,8 %
Interest expenses leasing IFRS 16 348 - 0,0 % 1 205 - 0,0 %
Other financial expenses/curreny
differences
3 053 5 373 -43,2 % -1 284 724 -277,3 %
EBT 13 660 5 873 132,6 % 43 108 26 017 65,7 %
Taxes 5 055 8 115 -37,7 % 11 238 12 570 -10,6 %
Profit/loss after tax 8 606 -2 242 483,8 % 31 870 13 447 137,0 %
Earnings per share
Number of shares outstanding 44 376 040 44 376 040 44 376 040 44 376 040
Av. Number of shares - own shares 44 196 649 44 271 496 44 231 636 44 271 496
Earnings per share 0,19 -0,05 0,72 0,30
Diluted earnings per share 0,19 -0,05 0,72 0,30
EBITDA per share 0,69 0,51 2,22 1,52
Diluted EBITDA per share 0,69 0,51 2,22 1,52
Total earnings Q4 2019 Q4 2018 Chg. % Year 2019 Year 2018 Chg. %
Profit/loss after tax 8 606 -2 242 483,8 % 31 870 13 447 137,0 %
Exchange differences on foreign
operations
5 785 18 957 -69,5 % -8 123 -7 187 -13,0 %
Total earnings 14 391 16 715 -13,9 % 23 748 6 260 279,3 %

Consolidated income statement

*) The transition to IFRS 16 amounts to MNOK 6.3 in Q4 2019 and MNOK 23.4 YTD 2019

Consolidated balance sheet

KNOK 31.12.2019 31.12.2018 30.09.2019 01.01.2019
ASSETS
Intangible assets 46 747 60 280 48 332 60 280
Goodwill 137 929 141 429 135 433 141 429
Tangible assets 53 658 58 086 55 759 58 086
Tangible assets leasing IFRS 16 59 784 - 56 111 70 584
Long term investments 1 553 849 547 849
Deferred tax 5 859 13 601 7 473 13 601
Non-current assets 305 530 274 245 303 655 344 829
Goods 138 366 127 897 127 049 127 897
Accounts receivable 180 412 200 340 183 700 200 340
Prepaid expenses 12 781 11 641 17 423 11 641
Other receivables 13 954 14 278 8 541 14 278
Bank deposits 39 498 26 985 49 618 26 985
Current assets 385 011 381 141 386 331 381 141
TOTAL ASSETS 690 542 655 386 689 986 725 970
EQUITY AND LIABILITIES
Share capital 27 513 27 513 27 513 27 513
Holding of own shares -107 -65 -119 -65
Other equity 236 498 237 689 221 894 237 689
Total equity 263 904 265 137 249 288 265 137
Long term interest bearing liabilities 23 858 49 800 31 193 49 800
Liabilities leasing IFRS 16 59 784 - 56 111 70 584
Other long term liabilities 3 904 20 694 9 252 20 694
Total long term liabilities 87 546 70 494 96 555 141 078
Short term interest bearing liabilities 58 667 31 789 74 476 31 789
Accounts payable 70 799 81 326 82 016 81 326
Taxes payable 1 091 2 990 178 2 990
Other short term liabilities 208 535 203 650 187 472 203 650
Total short term liabilities 339 092 319 755 344 143 319 755
TOTAL EQUITY AND LIABILITIES 690 542 655 386 689 986 725 970

Overview of changes in the equity Statement of cash flow

KNOK Share
capital
Treasury
shares
Other paid-in
equity
Translation
variances
Other
equity
Total
equity
Equity 31.12.2017 27 513 -65 351 262 52 316 -150 013 281 013
Dividend 2017 - - - - -22 136 -22 136
Profit this year after tax - - - - 13 447 13 447
Other comprehensive income and
expenses
- - - -7 187 - -7 187
Equity 31.12.2018 27 513 -65 351 262 45 130 -158 703 265 137
Purchase/sale of own shares - -42 - - -583 -625
Dividend 2018 - - - - -24 355 -24 355
Profit this year after tax - - - - 31 870 31 870
Other comprehensive income and
expenses
- - - -8 123 - -8 123
Equity 31.12.2019 27 513 -107 351 262 37 007 -151 770 263 904
KNOK Q4 2019 Q4 2018 Year 2019 Year 2018
Ordinary profit before tax 13 660 5 873 43 108 26 017
Net interest 760 1 080 3 558 3 129
Tax paid 3 012 2 564 799 2 092
Share of profit, associated companies -6 23 71 -215
Ordinary depreciation 7 167 10 157 30 680 37 587
Depreciation IFRS 16 5 969 - 22 156 -
Profit / loss on sale of fixed assets -298 88 -298 -505
Non-realised loss on financial instruments - 476 - 476
Change in inventories -10 335 19 312 -12 384 1 781
Change in receivables 4 944 -19 908 17 024 -41 955
Change in accounts payable -11 914 2 103 -9 274 -10 424
Change in other accrued items 10 387 -1 256 -14 806 3 383
Cash flow from operational activities 23 345 20 512 80 636 21 365
Payments for fixed assets -1 777 -4 128 -14 544 -11 070
Net payments for long term shares -1 000 - -1 000 -
Payment from sale of fixed assets 344 2 748 344 38 882
Profit on sale to Alimerka - - - -21 299
Dividends received from associated companies -77 - 225 -
Interest income -91 692 43 843
Cash flow from investment activities -2 602 -688 -14 932 7 356
Purchase/sale of own shares 225 - -625 -
Change in long-term debt -4 177 18 494 -26 827 29 862
Change in overdraft -20 201 -32 022 24 875 -46 830
Interest expenses -321 -1 772 -2 396 -3 972
Dividend paid - - -24 355 -22 136
Payment of leasing committments IFRS 16 -5 969 - -22 156 -
Interest expenses IFRS 16 -348 - -1 205 -
Cash flow from financing activities -30 791 -15 300 -52 689 -43 076
KNOK Q4 2019 Q4 2018 Year 2019 Year 2018
Ordinary profit before tax 13 660 5 873 43 108 26 017
Net interest 760 1 080 3 558 3 129
Tax paid 3 012 2 564 799 2 092
Share of profit, associated companies -6 23 71 -215
Ordinary depreciation 7 167 10 157 30 680 37 587
Depreciation IFRS 16 5 969 - 22 156 -
Profit / loss on sale of fixed assets -298 88 -298 -505
Non-realised loss on financial instruments - 476 - 476
Change in inventories -10 335 19 312 -12 384 1 781
Change in receivables 4 944 -19 908 17 024 -41 955
Change in accounts payable -11 914 2 103 -9 274 -10 424
Change in other accrued items 10 387 -1 256 -14 806 3 383
Cash flow from operational activities 23 345 20 512 80 636 21 365
Payments for fixed assets -1 777 -4 128 -14 544 -11 070
Net payments for long term shares -1 000 - -1 000 -
Payment from sale of fixed assets 344 2 748 344 38 882
Profit on sale to Alimerka - - - -21 299
Dividends received from associated companies -77 - 225 -
Interest income -91 692 43 843
Cash flow from investment activities -2 602 -688 -14 932 7 356
Purchase/sale of own shares 225 - -625 -
Change in long-term debt -4 177 18 494 -26 827 29 862
Change in overdraft -20 201 -32 022 24 875 -46 830
Interest expenses -321 -1 772 -2 396 -3 972
Dividend paid - - -24 355 -22 136
Payment of leasing committments IFRS 16 -5 969 - -22 156 -
Interest expenses IFRS 16 -348 - -1 205 -
Cash flow from financing activities -30 791 -15 300 -52 689 -43 076
Net change in liquid assets -10 048 4 524 13 015 -14 355
Cash and cash equivalents at the start of the period 49 618 20 381 26 985 41 503
Effect of foreign exchange rate fluctuations on foreign currency deposits -72 2 080 -502 -163
Cash and cash equivalents at the end of the period 39 498 26 985 39 498 26 985
KNOK Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 Year 2019 Year 2018
Income statement
Operating revenue 299 019 237 306 287 149 288 223 307 913 1 111 696 1 067 684
EBITDA 30 609* 17 820* 22 105* 27 685* 22 483 98 219* 67 457
EBITA 20 064 8 506 12 349 18 165 16 639 59 083 48 926
Operating profit EBIT 17 473 5 524 8 313 14 071 12 326 45 383 29 870
Ordinary profit before tax (EBT) 13 660 3 987 8 689 16 772 5 873 43 108 26 017
Profit/loss after tax 8 606 2 860 7 136 13 269 -2 242 31 870 13 447
EBITDA-margin 10,2 % 7,5 % 7,7 % 9,6 % 7,3 % 8,8 % 6,3 %
EBT-margin 4,6 % 1,7 % 3,0 % 5,8 % 1,9 % 3,9 % 2,4 %
Balance sheet
Non-current assets 305 530* 303 655* 312 364* 323 220* 274 245 305 530* 274 245
Current assets 385 011 386 331 368 288 384 557 381 141 385 011 381 141
Total assets 690 542 689 986 680 652 707 777 655 386 690 542 655 386
Total equity 263 904 249 288 243 348 265 564 265 137 263 904 265 137
Total long term liabilities 87 546* 96 555* 107 030* 117 854 70 494 87 546* 70 494
Total short term liabilities 339 092 344 143 330 274 324 359 319 755 339 092 319 755
Working capital 247 979 228 733 228 860 255 509 246 911 247 979 246 911
Equity ratio 38,2 % 36,1 % 35,8 % 37,5 % 40,5 % 38,2 % 40,5 %
Liquidity ratio 113,5 % 112,3 % 111,5 % 118,6 % 119,2 % 113,5 % 119,2 %
Net interest bearing debt 102 810 112 162 106 527 120 306 54 604 102 810** 54 604
Net leverage multiples 1,05 1,24 1,22 1,44 0,81 1,05 0,81
Net leverage multiples, excluding IFRS 16 0,56 0,77 0,60 0,71 0,81 0,56 0,81
Cash Flow
Cash flow from operatinal activities 23 345* 107* 46 455* 10 729 20 512 80 636 21 365
Net change in liquid assets -10 048 24 837 4 870 -6 644 4 524 13 015 -14 355
Share information
Number of shares 44 376 040 44 376 040 44 376 040 44 376 040 44 376 040 44 376 040 44 376 040
Weighted average shares outstanding 44 196 649 44 164 144 44 242 976 44 274 385 44 271 496 44 231 636 44 271 496
EBT per shares 0,31 0,09 0,20 0,38 0,13 0,97 0,59
Earnings per share 0,19 0,06 0,16 0,30 -0,05 0,72 0,30
Earnings per share, adjusted *** 0,25 0,13 0,25 0,39 0,05 1,03 0,73
Equity per share 6,0 5,6 5,5 6,0 6,0 6,0 6,0
Dividend per share - - 0,55 - - 0,55 0,50
Employees
Number of employees (end of period) 531 519 534 525 538 531 538
Average number of employees 525 527 530 532 554 528 565

Key figures

*) The transition to IFRS 16 had a positive effect on EBITDA and cash flow from operational activities with MNOK 6.3 in Q4 2019 and MNOK 23.4 YTD 2019. Fixed assets and long-term liabilities include MNOK 59.8 regarding IFRS 16.

**) Net interest-bearing debt includes the effect of IFRS 16 with KNOK 59.784 in Q4 2019, KNOK 56.111 in Q3 2019, KNOK 60.726 in Q2 2019 and KNOK 65.225 in Q1 2019.

***) Earnings per share, adjusted for depreciation of intangible assets, mainly from M&A.

Note 1 Confirmation of reporting framework

The condensed and consolidated quarterly financial statements are prepared in accordance with IAS 34 Interim Financial Reporting. The quarterly financial statements do not contain all the information required in an annual financial statement and should be read in connection with the Group financial statements for 2018.

Note 2 Key accounting principles

The accounting principles for the report are described in note 2 in the annual financial statements for 2018. The Group financial statements for 2018 were prepared in accordance with the IFRS principles and interpretations thereof, as defined by the EU, as well as other disclosure requirements pursuant to the Norwegian Accounting Act and the Oslo Stock Exchange regulations and rules applicable as at 31.12.2018. The quarterly report and the interim financial statements have not been revised by auditor. StrongPoint has conducted an assessment of IFRS 15, and its implementation will not have any significant impact on the Group. The Group has implemented IFRS 16 Leases beginning 1 January 2019 with a modified retrospective method. The effect of accounting for IFRS 16 is shown as an adjustment of the opening balance on 1 January 2019, without translating comparative figures. See note 5 for further information.

Note 3 Segmentinformation

Business areas

Operating revenue by geographical market

Operating revenue by product and service

*) The transition to IFRS 16 amounts to MNOK 6.3 in Q4 2019 and MNOK 23.4 YTD 2019.

*) Service and licenses

Q4 2019 Q4 2018 Year 2019 Year 2018
MNOK Revenue EBITDA EBT Revenue EBITDA EBT Revenue EBITDA EBT Revenue EBITDA EBT
Retail Technology 218,2 21,9 15,6 195,6 11,1 24,2 843,5 96,3 66,1 755,6 68,4 64,2
Cash Security 46,8 11,3 9,0 74,0 15,2 13,9 123,5 13,5 7,8 152,0 2,9 0,8
Labels 38,6 5,8 1,6 39,4 5,5 2,0 163,8 21,9 4,2 165,6 22,9 9,0
Elim / ASA -4,5 -8,4 -12,6 -1,0 -9,3 -34,2 -19,1 -33,4 -35,0 -5,5 -26,8 -48,0
Total 299,0 30,6* 13,7 307,9 22,5 5,9 1 111,7 98,2* 43,1 1 067,7 67,5 26,0
Q4 2019 Q4 2018 Year 2019 Year 2018
MNOK Norway Sweden Other Norway Sweden Other Norway Sweden Other Norway Sweden Other
Retail Technology 76,2 72,7 69,3 73,5 53,2 68,8 285,4 252,3 305,8 227,2 241,7 286,6
Cash Security 0,1 11,3 35,4 1,1 18,9 53,9 0,7 41,1 81,7 3,3 56,8 91,9
Labels 12,4 26,1 0,0 15,5 23,9 0,0 54,7 109,2 0,0 64,2 101,4 0,0
Elim / ASA -1,1 -3,3 0,0 0,0 -1,0 -0,0 -2,5 -16,7 0,0 0,0 -5,2 -0,3
Total 87,5 106,8 104,7 90,1 95,1 122,7 338,3 385,9 387,5 294,8 394,7 378,2
Q4 2019 Q4 2018 Year 2019 Year 2018
MNOK New sales Service* New sales Service* New sales Service* New sales Service*
Retail Technology 140,8 77,4 119,5 76,1 547,8 295,7 478,6 277,0
Cash Security 36,2 10,5 59,4 14,6 87,9 35,6 105,7 46,3
Labels 38,6 0,0 39,4 0,0 163,8 0,0 165,6 0,0
Elim / ASA -4,5 0,0 -1,0 0,0 -19,1 0,0 -5,5 0,0
Total 211,1 87,9 217,3 90,6 780,5 331,2 744,4 323,3

Note 4 Related parties

No significant transactions between the Group and related parties had taken place as at 31 December 2019.

Note 6 Top 20 shareholders as at 31 December 2019

Note 5 IFRS 16

The Group has implemented IFRS 16 Leases beginning 1 January 2019 with a modified retrospective method. The effect of accounting for IFRS 16 is shown as an adjustment of the opening balance on 1 January 2019, without translating comparative figures. At the transition to IFRS 16, the Group has listed KNOK 70,584 as a right of use in the balance sheet as an asset and correspondingly as a debt liability. StrongPoint leases several objects as buildings and cars that are affected by the transition, listed in the table below. Production equipment that is financially leased is not affected by the transition to IFRS 16 as this has already been carried out in accordance with the principles in IFRS 16.

Definitions

Working capital Inventories + accounts receivables – accounts payable
Equity per share Book value equity / number of shares
Operating revenue Sales revenue and profit from AC, Service companies
Operating revenue per employee Operating revenue / average number of employees
Operating cost per employee Operating cost / average number of employees
EBITDA Operating profit + depreciation fixed assets and intangible assets
EBITA Operating profit + amortization of intangible assets
EBIT Operating profit
EBITDA-margin EBITDA / operating revenue
EBT Profit before tax
EBT-margin EBT / operating revenue
Equity ratio Book value equity / total assets
Weighted average basic shares Issued shares adjusted for own shares on average for the year
Liquidity ratio Current assets / short term debt
Earnings per share Profit after tax / number of shares
Earnings per share adjusted Profit after tax + amortization of intangible assets / number of shares
Net leverage multiple Net Debt / 12 months rolling operating revenue
Net change in liquid assets The total changes in cash flow from operational actvities, investment
  • EBITDA Operating profit + depreciation fixed assets and intangible assets
  • Weighted average basic shares Issued shares adjusted for own shares on average for the year
  • Earnings per share adjusted Profit after tax + amortization of intangible assets / number of shares
  • Net change in liquid assets The total changes in cash flow from operational actvities, investment activities and financing activities
No. Name No. of shares %
1 HOLMEN SPESIALFOND 4 100 000 9,2 %
2 STRØMSTANGEN AS 3 933 092 8,9 %
3 AVANZA BANK AB 2 709 369 6,1 %
4 HSBC TTEE MARLB EUROPEAN TRUST 1 976 000 4,5 %
5 PROBITAS HOLDING AS 1 788 276 4,0 %
6 V. EIENDOM HOLDING AS 1 780 009 4,0 %
7 ZETTERBERG, GEORG (incl. fully owned companies) 1 633 000 3,7 %
8 NORDNET BANK AB 1 563 729 3,5 %
9 NORDNET LIVSFORSIKRING AS 1 158 762 2,6 %
10 VERDADERO AS 1 111 111 2,5 %
11 WAALER, JØRGEN (incl. fully owned companies) 1 000 000 2,3 %
12 RING, JAN 874 372 2,0 %
13 GLAAMENE INDUSTRIER AS 873 549 2,0 %
14 MP PENSJON PK 777 402 1,8 %
15 JOHANSEN, STEIN 500 000 1,1 %
16 GRESSLIEN, ODD ROAR 480 000 1,1 %
17 EVENSEN, TOR COLKA 470 000 1,1 %
18 SKANDINAVISKA ENSKILDA BANKEN AB 468 228 1,1 %
19 BJØRNSTAD, DANIEL 391 000 0,9 %
20 JACOBSEN, SVEIN (incl. fully owned companies) 380 000 0,9 %
Sum 20 largest shareholders 27 967 899 63,0 %
Sum 1 613 other shareholders 16 408 141 37,0 %
Sum all 1 633 shareholders 44 376 040 100,0 %
Retail
Tech
Cash
Security
Labels ASA/
Elim
Q4
2019
Retail
Tech
Cash
Security
Labels ASA/
Elim
Year
2019
Rent -2 406 -1 208 -1 223 - -4 837 -10.425 -3 607 -4 448 - -18 479
Cars -1 167 -75 -115 -122 -1 480 -3 906 -287 -566 -122 -4 881
EBITDA 3 574 1 283 1 339 122 6 317 14 330 3 894 5 014 122 23 361
Depreciations 3 451 1 266 1 147 105 5 969 13 706 3 779 4 567 105 22 156
Interest 122 17 192 17 348 625 115 447 17 1 205
Tangible assets IFRS 16 Cars 50 848
Tangible assets IFRS 16 Other 8 936
Leasing commitments
ex. interest
59 784

StrongPoint ASA Slynga 10, 2005 Rælingen strongpoint.com

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