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Vitec Software Group B Interim / Quarterly Report 2024
2988_ir_2024-07-12_dc0db37a-e7d3-405b-b5bc-90fd4616c2e6.pdf
Interim / Quarterly Report
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Interim report January–June 2024
SUMMARY OF INTERIM PERIOD, APRIL–JUNE 2024
- Net sales SEK 882 million (724), an increase of 22%
- Recurring revenues SEK 775 million (612), an increase of 27%
- EBITA SEK 264 million (226), an increase of 17%
- EBITA margin 30% (31)
- Operating profit SEK 196 million (164), an increase of 20%
- Operating margin 22% (23)
- Earnings per share before dilution SEK 3.18 (2.59)
- Cash flow from operating activities SEK 89 million (80)
- Acquisition of Bidtheatre
SUMMARY OF INTERIM PERIOD, JANUARY–JUNE 2024
- Net sales SEK 1,598 million (1,336), an increase of 20%
- Recurring revenues SEK 1,391 million (1,121), an increase of 24%
- EBITA SEK 484 million (412), an increase of 18%
- EBITA margin 30% (31)
- Operating profit SEK 349 million (286), an increase of 22%
- Operating margin 22% (21)
- Earnings per share before dilution SEK 5.46 (4.66)
- Cash flow from operating activities SEK 783 million (569)
Vitec Software Group has its origin and headquarters in Umeå, Sweden. Forums for networking and knowledge sharing within the Group are provided here.
Brief facts 24,600
customers
86% Proforma recurring revenues, ARR
11 40
1,550 employees
3,197 SEK million Proforma net sales
countries Business units
This is Vitec
Vitec is the market leader for vertical software and has its origin and headquarters in Umeå, Sweden. We develop and deliver standardized software for various functions in society. They can be found at the heart of a variety of businesses and activities, including energy, insurance, retail, hotels, churches and health care. Our products enable us to help our customers achieve greater efficiency and to generate societal benefit. The expertise of our employees, combined with our shared corporate culture and business model, enable continuous improvement and innovation. Vitec is listed on the Nasdaq Stockholm Large Cap list.
GROWTH – DEVELOP AND ACQUIRE
Vitec is an industry player with a longterm outlook. Our growth mainly occurs through corporate acquisitions, but also organically. Our strong cash flow enables us to both reinvest in products and make acquisitions. Continual development of our products is crucial to ensure that our offering will remain relevant in the future.
RECURRING REVENUES
Our business model is based on a high percentage of recurring revenues. This provides us with stable and predictable cash flows that create the prerequisites for a long-term approach. It also makes the Group less sensitive to temporary declines within individual business units.
VALUE-DRIVEN ORGANIZATION
Within the framework of our decentralized organization, the corporate culture plays a significant role in corporate
governance and is important for our long-term success. Our values, brand promise and Code of Conduct are the three cornerstones of our corporate culture. Through an array of forums, we create conditions for employees and leaders to become part of our corporate culture.
SUSTAINABILITY IN THE BUSINESS MODEL
Sustainability is integral to our business model and culture. To structure our work, we have defined four focus areas: Responsible growth, Enabling products, Empowered people and Reduced footprint. They are specified based on where and how our business has the greatest impact on the world around us, as well as areas where we believe we can make the greatest difference. Read more on page 11 as well as in the annual report.
OUR VISION
Shaping a wiser and more sustainable future
OUR VALUES
Our products – our foundation Vertical Market Software
Keep it simple
Simple solutions succeed
Trust and transparency
Collaboration and responsibility create success
OUR BRAND PROMISE
To rely on — today and tomorrow
OUR BUSINESS CONCEPT
To contribute to the success of our customers by developing and providing standardized and niche businesscritical software.
Comments from the CEO
Continued growth with robust margins
Vitec's growth strategy combines both organic expansion and strategic acquisitions. For the second quarter of 2024, we achieved a sales increase of 22%, contributing to a 20% growth for the first half of the year, aligning with our ten-year average annual growth rate of 22%.
Our focus on organic growth is underscored by our analysis of pro forma rolling 12-month revenue, a metric that reflects our current annual rate and growth. Our business units, which develop and offer niche business-critical software, operate in stable markets characterized by long-term customer relationships.
As we entered 2024, our customer base remained steady, with new sales showing caution but demonstrating strong figures in additional sales to existing customers.
In this quarter, our business unit Enova, providing balancing services in the Dutch energy grid, has significantly increased volumes. This surge is driven by the daily market needs, with the integration of more renewable energy sources into the energy mix necessitating greater balancing power. The high proportion of renewables during the summer has resulted in substantial volumes, benefiting our customers and is clearly reflected in the rise in transaction-based recurring revenues.
For the period, our EBITA increased by 17% to SEK 264 million, yielding a margin of 30%. The cash flow from operating activities also showed an improvement compared to the same period last year, with significant gains in the first half of the year. This, coupled with our healthy debt levels and available credit, ensures our preparedness for further acquisitions.
In the second quarter, we acquired Bidtheatre, a specialized vertical software company primarily supporting media agencies in Sweden. In early July, we announced the acquisition of the Swedish software company Taxiteknik, which provides innovative solutions for the taxi industry. These acquisitions bring the total to three so far this year, with more opportunities under continuous evaluation. We have also consolidated a couple of business units to optimize organizational efficiency and customer offering, hence we now present 40 business units.
I extend my best wishes for a pleasant summer to all our customers, employees, and stakeholders.
Olle Backman, CEO and President Vitec Software Group
"The cash flow from operating activities showed an improvement compared to the same period last year, with significant gains in the first half of the year. This, coupled with our healthy debt levels and available credit, ensures our preparedness for further acquisitions."
In June, Vitec acquired the software company Bidtheatre, which develops and delivers software for programmatic advertising – targeted advertising in digital channels – in Sweden and Norway.
5
Group financial information
NET SALES AND EARNINGS
April–June 2024 Net sales
Net sales for the period totaled SEK 882.2 million (723.7) and included recurring revenues of SEK 774.5 million (612.4), license revenues of SEK 9.2 million (14.3), service revenues of SEK 84.5 million (84.8) and other revenues of SEK 13.9 million (12.2). Recurring revenues consist of subscription-based revenue of SEK 519.7 million (460.4) and transaction-based revenue of SEK 254.8 million (152.0). The increase in transaction-based revenues is mainly attributable to increased volumes.
Comments on sales
Net sales rose a total of 22% for the period and recurring revenues rose by 27%.
Other revenues totaled SEK 13.9 million, which is an increase of 14% compared with the corresponding period last year. License revenues declined 36%, compared with the corresponding period last year. Service revenues were unchanged year-on-year. Recurring revenues accounted for 88% of net sales, compared with 85% for the corresponding period in 2023. During the period, acquired companies contributed SEK 17.7 million in net sales.
Earnings
EBITA was SEK 264.4 million (226.2), with an EBITA margin of 30.0% (31.3). Operating profit was SEK 196.2 million (163.9), with an operating margin of 22.2% (22.6). Profit after tax amounted to SEK 119.5 million (96.9). Earnings per share before dilution totaled SEK 3.18 (2.59).
Comments on earnings
EBITA increased 17%, compared with the corresponding period in 2023. IFRS 16 related to leases had an impact of SEK 18.1 million (16.6) on operating profit, and SEK -17.5 million (-13.6) on depreciation. The net of capitalized development costs, amortization on intangible fixed assets, and acquisition-related amortization had a negative effect on operating profit of SEK -13.8 million, compared with SEK -10.0 million the corresponding period last year. Acquisition-related costs are included in operating profit and amount to SEK -0.5 million (-1.4).
Net financial items total SEK -42.8 million (-35.2). The items consist of net interest income of SEK -30.9 million (-21.0), as well as non-cash remeasurement to fair value of supplementary purchase considerations of SEK -9.2 million (-14.2) and impairment of securities held as fixed assets of SEK -2.7 million (0.0). The increase in net interest income is attributable to higher interest rates and increased borrowing in conjunction with acquisitions.
Vitec Software Group develops and provides software for real estate agents in Norway and Sweden.
January–June 2024 Net sales
Net sales for the period totaled SEK 1,598.2 million (1,336.3) and included recurring revenues of SEK 1,390.8 million (1,121.5), license revenues of SEK 17.4 million (24.8), service revenues of SEK 170.5 million (171.5) and other revenues of SEK 19.6 million (18.5). Recurring revenues consist of subscription-based revenue of SEK 1,023.0 million (901.5) and transaction-based revenue of SEK 367.8 million (220.0). The increase in transaction-based revenues is mainly attributable to increased volumes.
Comments on sales
Net sales rose a total of 20% for the period and recurring revenues rose by 24%.
Other revenues totaled SEK 19.6 million, which is an increase of 6% compared with the corresponding period last year. License revenues declined 30%, compared with the corresponding period last year. Service revenues fell by 1%, compared with the corresponding period in 2023. Recurring revenues accounted for 87% of net sales, compared with 84% for the corresponding period in 2023. During the year, acquired companies contributed SEK 22.1 million in net sales.
Earnings
EBITA was SEK 484.5 million (411.6), with an EBITA margin of 30.3% (30.8). Operating profit was SEK 349.2 million (286.5), with an operating margin of 21.8% (21.4). Profit after tax amounted to SEK 205.0 million (174.0). Earnings per share before dilution totaled SEK 5.46 (4.66).
Comments on earnings
EBITA increased 18%, compared with the corresponding period in 2023. IFRS 16 related to leases had an impact of SEK 36.1 million (30.2) on operating profit, and SEK -34.9 million (-26.6) on depreciation. The net of capitalized development costs, amortization on intangible fixed assets, and acquisition-related amortization had a negative effect on operating profit of SEK -20.1 million, compared with SEK -4.6 million the corresponding period last year. Acquisition-related costs are included in operating profit and amount to SEK -1.9 million (-11.4).
Net financial items total SEK -80.4 million (-56.5). The items consist of net interest income of SEK -61.2 million (-37.2), as well as non-cash remeasurement to fair value of supplementary purchase considerations of SEK -16.5 million (-19.3) and impairment of securities held as fixed assets of SEK -2.7 million (0.0). The increase in net interest income is attributable to higher interest rates and increased borrowing in conjunction with acquisitions.
1,598 SEKmillion net sales January–June
| 2024 Apr–Jun |
2023 Apr–Jun |
Change | 2024 Jan–Jun |
2023 Jan–Jun |
Change | |
|---|---|---|---|---|---|---|
| Net sales, SEK million | 882 | 724 | 22% | 1,598 | 1,336 | 20% |
| Recurring share of net sales, % | 88% | 85% | 87% | 84% | ||
| EBITA, SEK million | 264 | 226 | 17% | 484 | 412 | 18% |
| EBITA margin, % | 30% | 31% | 30% | 31% | ||
| Operating profit/loss, SEK million | 196 | 164 | 20% | 349 | 286 | 22% |
| Operating margin, % | 22% | 23% | 22% | 21% | ||
| Net profit/loss for the period, SEK million | 119 | 97 | 23% | 205 | 174 | 18% |
| Earnings per share, SEK | 3.18 | 2.59 | 5.46 | 4.66 |
ORGANIC GROWTH
| SEK million | R12 June 2024 |
R12 June 2023 |
Growth |
|---|---|---|---|
| Reported subscription-based recurring revenues | 1,994 | 1,690 | |
| Effect of acquired units | 26 | 121 | |
| Proforma subscription-based recurring revenues | 2,020 | 1,811 | 12% |
| Reported transaction-based recurring revenues | 621 | 300 | |
| Effect of acquired units | 123 | 335 | |
| Proforma transaction-based recurring revenues | 744 | 635 | 17% |
| Reported recurring revenues | 2,615 | 1,990 | |
| Effect of acquired units | 149 | 456 | |
| Proforma recurring revenues | 2,764 | 2,446 | 13% |
| Reported net sales | 3,040 | 2,419 | |
| Effect of acquired units | 157 | 504 | |
| Proforma net sales | 3,197 | 2,923 | 9% |
Organic growth subscriptionbased recurring revenues
Organic growth in net sales
%
Rolling 12, July 2023–June 2024
Recurring revenues calculated on a rolling 12-month basis including revenues from acquired units amount to SEK 2,764 million. Compared with the same period last year, including revenues from acquired units, the increase is 13%.
We divide our recurring revenues into subscription-based recurring revenues and transaction-based recurring revenues. Organic growth of our subscription-based recurring revenues is 12%;
organic growth of transaction-based recurring revenues is 17%.
Net sales calculated on a rolling 12-month basis, including sales from acquired units, amount to SEK 3,197 million. Compared with the same period last year, including sales from acquired units, the increase is 9%.
We estimate that approximately 2% of this growth is attributable to currency effects.
Diagrams on Group trends
Sales by quarter EBITA and EBITA margin by quarter
Q2 2021–Q2 2024
Sales broken down by business unit and customer
Because we operate in a number of niche markets and countries, we have good distribution of revenue in terms of both geography and area of operation. Although we operate in several niche markets, we still engage in essentially the same business: we develop and deliver standardized software. Some are complete enterprise systems, while others provide support for specific aspects of our customers' operations.
As we continue to acquire profitable vertical software companies, we expect the distribution of risk to continue in a positive direction.
VITEC WORLDWIDE
Sales by market, January–June 2024
BREAKDOWN OF SALES
Our sales are evenly spread across our 40 business units. No individual business unit accounts for more than 11% of consolidated sales.
Breakdown of sales among our
11%
11% av of net sales
89%
Remaining business units Largest business unit
business units
CUSTOMERS
We have about 24,600 customers. The Group's ten largest software customers account for approximately 7% of sales. The single largest software customer accounts for approximately 1.4% of sales.
93% 7% Remaining customers 10 largest customers
Vitec operates in 11 countries.
Sustainability in the business model
Sustainability is part of the entire value chain, from the development and use of our products to the way we run and do business. This effort is a continuous journey together with our customers, partners and other stakeholders.
OUR FOCUS AREAS
To structure this effort and clarify its direction, we have defined four focus areas. They are specified based on where and how our business has the greatest impact on the world around us, as well as areas where we believe we can make the greatest difference. This also applies to the choice of the Sustainable Development Goals (SDGs) linked to each focus area.
RESPONSIBLE GROWTH
We work continuously to improve and strengthen our business and our working methods, based on trust, transparency, integrity and fact-finding.
The common brand Vitec, our business model and our focus on long-term growth provide stability and facilitate sustainable investments in our products. Equally important for maintaining responsible growth is our decentralized model for how we work, control, follow up and manage risks in our business. Our brand promise, To rely on – today and tomorrow, our values and our Code of Conduct provide valuable guidance on how to act ethically and sustainably. We choose suppliers who act professionally and appropriately. Our long-term approach to acquisitions also contributes to our social responsibility, since we acquire well-managed companies whose operations and products are future-proofed when the company becomes part of the Vitec Group.
In this area, we primarily support SDGs 8, 16 and 17.
ENABLING PRODUCTS
We develop and provide software to enable a more efficient, sustainable, resilient and inclusive society, where safe, secure and reliable operation with high demands for data ethics is crucial. We help our customers realize their ambitions through close collaboration, innovations and continuous investments.
In this area, we primarily support SDG 9.
EMPOWERED PEOPLE
To achieve success, Vitec depends on motivated and engaged employees with the knowledge and skills necessary to constantly develop the business – employees who can be proud of how their work helps to benefit society. We believe in short decision paths, freedom under responsibility and continuous skills development to enable each individual to reach their full potential. We believe that diversity, teamwork and a healthy work environment provide increased job satisfaction and good results.
In this area, we primarily support SDGs 3, 5 and 10.
REDUCED FOOTPRINT
We are determined to minimize our adverse impact on the climate and the environment, and this attitude permeates all of our decisions. We achieve this by constantly improving our resource efficiency, reducing our waste and making climate- and eco-friendly purchases. We also replace fossil fuels with fuels from renewable energy sources and optimize our travel.
In this area, we primarily support SDGs 7, 12 and 13.
Our business units
We conduct our operations through our 40 independent business units. Vitec develops and delivers software aimed at various functions in society. They can be found at the heart of a variety of businesses and activities, including
energy, insurance, retail, hotels, churches and health care. Our products enable us to help our customers achieve greater efficiency and to generate societal benefit.
BUSINESS UNITS
| Registered | Acquisition | Sales 2023, | Recurring, | ||
|---|---|---|---|---|---|
| Business unit | Software for: | office | year | MSEK | 2023 |
| ABS Laundry Business Solutions |
The global laundry and textile rental industry. | NL | 2022 | 252 | 46% |
| Vitec Actor Smartbook | Municipal culture and recreation administration offices, as well as visitor facilities in Norway and Sweden. |
SE | 2018 | 55 | 84% |
| Vitec Acute | Healthcare companies in Finland. | FI | 2013 | 92 | 89% |
| Vitec Agrando | Church-related administration in Norway. | NO | 2018 | 40 | 94% |
| Vitec ALMA | Information management within the process industry and energy companies in Finland. |
FI | 2020 | 51 | 59% |
| Vitec Aloc | Banking and finance industry in the Nordic countries and western Europe. |
DK | 2014 | 143 | 87% |
| Vitec Appva | Healthcare and social services sector in Sweden. | SE | 2020 | 51 | 97% |
| Vitec Autosystemer | Automotive, transportation and machinery industry in Norway. | NO | 2014 | 53 | 94% |
| Vitec Avoine | Local associations, national organizations and golf facilities in Finland. |
FI | 2019 | 55 | 87% |
| Vitec Bidtheatre | Media agencies in Sweden and Norway. | SE | 2024 | 113 | 100% |
| Vitec Capitex Finanssystem |
Banking and finance industry, primarily in Sweden and with some establishment in Norway and Finland. |
SE | 2010 | 30 | 92% |
| Vitec Cito | Pharmacy market in Denmark. | DK | 2018 | 46 | 78% |
| Vitec Codea | Emergency service activities and field management of emergency vehicles in Finland. |
FI | 2023 | 19 | 75% |
| Vitec Datamann | Car dealers and auto repair shops in Denmark. | DK | 2015 | 71 | 84% |
| Vitec DocuBizz | Automotive industry in northern Europe and the US. | DK | 2022 | 36 | 95% |
| Vitec Energy | Electricity traders and owners of electricity and district heating grids in about 25 different countries. |
SE | 1998 | 47 | 90% |
| Vitec Enova | Energy management and grid balancing services in the Netherlands. |
NL | 2023 | 335 | 100% |
| Vitec Fastighet | Construction and property management industry in Sweden | SE | 1985 | 254 | 77% |
| Vitec Fixit | Hair and beauty salons in Norway. | NO | 2019 | 66 | 97% |
| Vitec Forsikring | Insurance companies in Norway and Sweden. | NO | 2015 | 46 | 71% |
| Vitec Futursoft | Automotive industry and machinery sector in Finland and Sweden. |
FI | 2016 | 115 | 89% |
| Registered | Acquisition | Sales 2023, | Recurring, | ||
|---|---|---|---|---|---|
| Business unit | Software for: | office | year | MSEK | 2023 |
| Vitec HK data | Health and welfare sector in Norway. | NO | 2019 | 21 | 84% |
| Vitec Hotelinx | Hotels and tourism in Finland. | FI | 2022 | 21 | 91% |
| Vitec Katrina | Church-related administration in Finland. | FI | 2019 | 30 | 88% |
| Vitec LDC | Career and personal development, training and retraining in the Netherlands. |
NL | 2024 | 22 | 92% |
| Vitec Megler | Real estate agents in Norway. | NO | 2011 | 123 | 94% |
| Vitec Memorix | Archives, digital heritage and collections in the Benelux region. | NL | 2023 | 47 | 82% |
| Vitec MV | Education sector in Denmark, Norway and Sweden. | DK | 2017 | 44 | 95% |
| Vitec Mäklarsystem | Real estate agents in Sweden. | SE | 2010 | 85 | 98% |
| Vitec Neagen | Healthcare sector in Finland. | FI | 2023 | 48 | 61% |
| Vitec Nordman | Food and grocery retail industry in Sweden | SE | 2021 | 20 | 96% |
| Vitec Plania | Property and facility management in Norway. | NO | 2016 | 39 | 78% |
| Vitec Raisoft | Healthcare and social services company in Finland and Switzerland. |
FI | 2022 | 86 | 78% |
| Vitec Samfundssystem | Administrative services for churches and preschools in Sweden. | SE | 2018 | 46 | 83% |
| Vitec Scanrate | Bond market in Denmark. | DK | 2022 | 64 | 96% |
| Vitec Tietomitta | Private and municipal waste-and-resource processing in Finland. |
FI | 2016 | 86 | 91% |
| Vitec Travelize | Travel agencies mainly in Denmark, Norway and Sweden. | SE | 2021 | 23 | 89% |
| Vitec Unikum | Retail trade and manufacturing industry in Sweden. | SE | 2021 | 112 | 85% |
| Vitec Vabi | Sustainable energy management for the real estate and property management industry in the Netherlands. |
NL | 2021 | 98 | 99% |
| Vitec Visiolink | Media companies in Europe. | DK | 2020 | 73 | 77% |
During the period, Vitec Nice and Vitec WIMS were merged; the business unit is now called Vitec Forsikring. Vitec DL System is now part of Vitec Actor Smartbook and is no longer its own business unit as of the second quarter of 2024.
Balance sheets and cash flow
LIQUIDITY AND FINANCIAL POSITION
The Group's cash and cash equivalents at the end of the period totaled SEK 276.3 million (396.6). In addition to cash and cash equivalents, Vitec has an overdraft facility of SEK 125.0 million and SEK 1016.0 million in unutilized portions of the credit facility, which amount to a total of SEK 3,000 million. The terms and conditions of the company's credit agreement contain restrictions, known as covenants. The Group has fulfilled the terms and conditions in their entirety during the period.
At June 30, 2024, interest-bearing liabilities totaled SEK 2,207.3 million (1,785.8). Non-current interest-bearing liabilities comprised bank loans of SEK 1,995.1 million, as well as convertible debentures totaling SEK 66.2 million. Current interest-bearing liabilities comprised bank loans of SEK 1.4 million as well as convertible debentures totaling SEK 144.6 million. Interest-bearing net debt amounts to SEK 1,931.1 million (1,389.2).
The convertible loans consist in part of convertible debentures subscribed for in conjunction with acquisitions, and in part of employee convertibles. The maximum potential dilution from these convertible loans amounts to 1.0% of capital and 0.6% of votes.
During the period, a convertible loan was converted, which reduced financial liabilities by SEK 2.4 million.
Liabilities relating to right-of-use assets in the form of leases for premises are included in other non-current liabilities of SEK 29.8 million and in other current liabilities of SEK 50.5 million.
The total supplementary contingent consideration as of June 30 was SEK 710.5 million, including a non-current portion of SEK 424.6 million and a current portion of SEK 285.9 million.
CASH FLOW AND INVESTMENTS
The Group has not used the credit facility for any investments in 2024, nor have any repayments been made to the facility during the year. Amortization of
bank loans amounted to SEK 1.4 million; amortization related to right-of-use assets totaled SEK 36.1 million. Cash flow from operating activities was SEK 782.8 million (568.5). Investments totaled SEK 193.0 million in capitalized work, SEK 5.3 million in other intangible fixed assets and SEK 3.8 million in property, plant and equipment. Investments in right-of-use assets not affecting cash flow totaled SEK 17.2 million. As a result of acquisitions, SEK 202.7 million was invested in product rights, brands, customer agreements and goodwill.
The fourth and final payment of the dividend for financial year 2022 was made on March 28, 2024, when SEK 21.4 million was paid. The first payment of the dividend for financial year 2023 was made on June 30, when SEK 28.1 million was paid.
SHAREHOLDERS' EQUITY
Equity attributable to Vitec's shareholders totaled SEK 3,570.7 million (3,489.6). The equity/assets ratio is 44% (47). On April 23, the Annual General Meeting resolved to pay a dividend of SEK 3.00 per share, totaling a maximum of SEK 121.6 million. The dividend will be divided up and paid on four payment dates: June 30, September 30, December 30 and March 30, 2025.
As of June 30, there are two outstanding warrant programs. The maximum potential dilution from these warrant programs amounts to 0.6% of capital and 0.4% of votes.
There is also a long-term share savings plan, ESSP 2023, which was offered to all employees. Provided that the employee has made a personal investment in shares in the company (savings shares), the employee is allocated a corresponding number of matching share rights. The cost of the matching share rights during the period amounts to SEK 5.1 million, recognized as a personnel expense and in equity.
During the period, 37,392 class B shares were also repurchased from the market. These shares will be used as matching shares. The purchase amount of SEK 21.3 million was recognized in shareholders' equity.
TAXES
Current tax for the period amounted to SEK -53.3 million (-33.8). Deferred tax totaled SEK -10.5 million (-22.2).
Profit before tax is SEK 268.8 million (230.0). Non-deductible expenses and non-taxable income amount to SEK 15.4 million (12.5), which results in a taxable profit totaling SEK 284.2 million (242.5).
Tax expense for the year corresponds to an average tax rate of 22.5% (23.1).
Growth by acquisition
Acquired annual sales
ACQUISITIONS DURING THE PERIOD
During the first half of 2024, two acquisitions were completed: LDC I-talent Solutions B.V. and Bidtheatre AB. From the acquisition date up to and including June 30, revenues in the acquired company totaled SEK 22.1 million in sales and SEK 6.1 million in EBITA. If consolidation had occurred at the beginning of the year, the companies would have provided the Group with an additional approximately SEK 60.5 million in sales and SEK 10.4 million in EBITA. The acquisition-related expenses are recognized in operating profit and total SEK 1.9 million.
The goodwill items are not tax deductible and are deemed to be attributable to anticipated profitability and complementary expertise requirements, as well as anticipated synergy effects, in the form of the joint development of our products.
The acquisitions added SEK 16.7 million in product rights, SEK 7.3 million in brands, SEK 68.2 million in customer agreements and SEK 106.9 million in goodwill. Expensed portions of contingent considerations amount in total to a discounted value of SEK 45.1 million and are subject to gross margin improvements and EBIT improvements over the next several years. Contingent considerations are valued at discounted value of maximum outcome.
Acquisition Bidtheatre AB
On June 3, Vitec acquired all shares in the Swedish software company Bidtheatre AB.
Bidtheatre develops and delivers a Demand Side Platform (DSP) for programmatic marketing. The software is for advertising procurement in various digital channels, including banners, audio, video, native advertising and digital out-of-home screens, with well-developed features for target group tailoring.
The company had sales of SEK 113 million during the financial year 2023. The acquisition is deemed to yield an immediate increase in earnings per share.
Payment is in cash and with a convertible, with deviation from shareholders' preferential rights in accordance with the authorization from the Annual General Meeting on April 2024. The convertible matures in 36 months, and at full conversion will have a dilutive effect on capital of less than 0.1%.
Consolidation will commence as of the acquisition date.
INVESTMENTS: CO-OWNERSHIP
Our subsidiary Malmkroppen AB aims to invest in Nordic software companies that are in an earlier phase than the software companies that are usually acquired.
Investment in Voxo AB
On April 12, Malmkroppen expanded its ownership stake in Swedish software company Voxo AB. Voxo is a Swedish voice technology company specializing in conversation-based AI solutions. Vitec holds a 13.8% stake in the company after the investment.
Vitec Management Conference is an opportunity for managers throughout the Group to meet and exchange experiences. The conference is held every other year, and in May this year, we were pleased to welcome everyone to Umeå.
Other significant events during the period
ANNOUNCEMENT FROM THE ANNUAL GENERAL MEETING
The Annual General Meeting of Vitec Software Group AB (publ), corp. reg. no. 556258-4804, was held on April 23, 2024, at Universum in Umeå. Shareholders were invited to attend the meeting physically, by proxy, or by postal voting. Both shareholders and others were offered the opportunity to follow the Annual General Meeting (AGM) by webcast.
The AGM resolved to re-elect the Board members Lars Stenlund, Anna Valtonen, Birgitta Johansson-Hedberg, Jan Friedman, Kaj Sandart and Malin Ruijsenaars. Lars Stenlund was re-elected as Chairman of the Board of Directors.
The AGM resolved, for the period until the end of the next AGM, to elect authorized auditing firm Deloitte AB as new auditors.
The AGM also resolved to introduce a new program period for the long-term share savings plan for current and future employees of the Group, and to introduce a long-term, performancebased share savings plan for top management of the Vitec Group.
ORGANIZATIONAL CHANGE
During the period, a decision was made to strengthen Vitec's finance organization by hiring Peter Lidström as new CFO.
Peter will begin on September 1 and has a broad background as both CEO and CFO of companies in the IT and software industry. In his role as CFO, Peter will be part of company management.
Peter succeeds Sara Nilsson, who will continue as Head of Group Reporting & Controlling at Vitec.
Significant events after the period
VITEC ACQUIRES THE SOFTWARE COMPANY TAXITEKNIK NORDIC AB
Vitec Software Group AB (publ) strengthens its position in Vertical Market Software on July 9, by signing an agreement to acquire a majority of the shares in the Swedish software company Taxiteknik Nordic AB. Taxiteknik has an annual revenue of just over SEK 20 million.
The software company Taxiteknik develops and delivers a complete business system for taxi companies.
Payment will be in cash. The acquisition is expected to yield an immediate increase in earnings per share for Vitec. Before closing, the acquisition needs approval from the Inspectorate of Strategic Products under the Screening of Foreign Direct Investments Act.
At the time of this report's publication there were no financial statements available that could serve as the basis of a more detailed description of the acquisition. For this reason no information is presented about the fair value of acquired assets, and acquired assets and liabilities. We expect the future items of a detailed acquisition plan to comprise product rights, customer agreements, brands and goodwill. Goodwill is deemed to be attributable to anticipated profitability and complementary expertise requirements as well as expected synergies in the form of the joint development of our products.
Risks and uncertainties
Material risks and uncertainties are described in the administration report of the 2023 Annual Report under "Risks and uncertainties" on pages 68–74, in Note 1, under the section "Critical estimates and judgements" on pages 117–118, and in Note 15 "Financial risks and capital risk management" on pages 139–140. No material changes have occurred since then.
Parent Company
Net sales totaled SEK 94.1 million (83.6) and essentially comprised invoicing to subsidiaries for services rendered. Profit after tax was SEK -75.1 million (-118.4). Parent Company earnings were charged with unrealized foreign-exchange losses totaling SEK -62.0 million (-122.2).
The Parent Company is generally exposed to the same risks and uncertainties as the Group; refer to the above section, "Risks and uncertainties".
Related-party transactions
No significant transactions with related parties occurred in the Group or Parent Company during the period.
Accounting and measurement policies
This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU, and the Swedish Annual Accounts Act. The Parent Company's accounts were prepared in accordance with the Annual Accounts Act and recommendation RFR 2 Accounting for Legal Entities No new or amended standards entered into force as of 2024 that are expected to affect the Group's accounts.
Disclosures in accordance with IAS 34.16A appear in the financial statements and related notes, as well as in other parts of the interim report.
OPERATING SEGMENTS
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker of the Company. In the Vitec Group, the CEO and President has been identified as chief executive decision-maker who evaluates the Group's financial position and performance and makes decisions on resource allocation. The operating segments form the operational structure for internal governance, follow-ups, and reporting. The CEO analyzes and monitors the sales and earnings of the operation based on the total consolidated operations. The assessment is thus that the Group's operations consist of one segment.
INCENTIVE PROGRAM
There is an ongoing convertible program aimed at all personnel in the form of convertible debentures. The shares were issued on market terms. Consequently, there are no benefits that can be recognized as share-based remuneration.
Warrant incentive programs are also underway, in the form of warrants, aimed at around 45 people. The shares were issued on market terms. The fair value of options granted is calculated using a modified version of the Black-Scholes valuation model. The value of the option premiums is recognized as share-based remuneration.
As of the third quarter of 2023, a longterm share savings plan aimed at all staff has been in place. If the conditions are met, participants receive matching shares. The value of the matching shares is recognized as share-based remuneration.
FINANCIAL INSTRUMENTS
Classification and measurement Financial instruments are recognized initially at cost corresponding to the instrument's fair value plus transaction costs. A financial instrument is classified at initial recognition based on, among other factors, the purpose for which the instrument was acquired. Vitec has financial instruments under the categories loans and accounts receivable, financial assets at fair value, financial
liabilities at fair value and financial liabilities at amortized cost.
Financial liabilities measured at fair value
In accordance with IFRS 7, the fair value of each financial asset and financial liability must be disclosed, regardless of whether they are recognized in the balance sheet. Vitec deems the fair value of the financial assets/liabilities to be close to the recognized carrying amount.
All of the company's financial instruments that are subject to measurement at fair value are classified as level 3 and pertain to securities held as fixed assets, as well as contingent considerations in conjunction with acquisitions.
Securities held as fixed assets are measured at estimated fair value; any adjustments are made through profit or loss.
Significant amounts of supplementary contingent considerations are measured at estimated fair value; any adjustments are made through profit or loss.
Recurring measurements at fair value, at June 30, 2024, SEK thousands
| Level 1 | Level 2 | Level 3 | Book value | |
|---|---|---|---|---|
| Securities held as fixed assets | 38,086 | 38,086 | ||
| Total assets | 38,086 | 38,086 | ||
| Supplementary contingent considerations, due within 1 year | 285,894 | 285,894 | ||
| Supplementary contingent considerations, due in more than 1 year, but within 3 years | 424,618 | 424,618 | ||
| Supplementary contingent considerations, due in more than 3 years, but within 5 years | - | - | ||
| Total liabilities | 710,512 | 710,512 |
Signature
Vitec Software Group develops and provides software for industries including property and facility management in Denmark, Norway, the Netherlands and Sweden.
AFFIRMATION OF THE BOARD OF DIRECTORS
The Board of Directors and the CEO hereby certify that this report provides a fair view of the Group's and the Parent Company's operations, position and performance and describes the material risks and uncertainties facing the Parent Company and the companies included in the Group.
Umeå, July 12, 2024
Lars Stenlund Chairman of the Board
Jan Friedman Board member
Kaj Sandart Board member Birgitta Johansson-Hedberg Board member
Anna Valtonen Board member
Malin Ruijsenaars Board member
Olle Backman CEO and President
Consolidated statement of profit/loss
| SEK THOUSANDS | 2024 Apr–Jun |
2023 Apr–Jun |
2024 Jan–Jun |
2023 Jan–Jun |
2023 Jan–Dec |
|---|---|---|---|---|---|
| OPERATING REVENUES | |||||
| Recurring revenues | 774,512 | 612,416 | 1,390,816 | 1,121,474 | 2,346,036 |
| License revenues | 9,231 | 14,306 | 17,412 | 24,812 | 46,861 |
| Service revenues | 84,532 | 84,772 | 170,460 | 171,454 | 343,270 |
| Other revenues | 13,923 | 12,157 | 19,558 | 18,531 | 41,398 |
| NET SALES | 882,199 | 723,652 | 1,598,245 | 1,336,271 | 2,777,565 |
| TOTAL REVENUES | 882,199 | 723,652 | 1,598,245 | 1,336,271 | 2,777,565 |
| Capitalized development costs | 95,239 | 82,767 | 193,048 | 170,681 | 348,412 |
| OPERATING EXPENSES | |||||
| Purchase of goods and services | -211,123 | -130,576 | -315,164 | -205,144 | -436,593 |
| Other external expenses | -78,402 | -73,588 | -152,208 | -150,742 | -291,553 |
| Personnel expenses | -359,269 | -323,640 | -714,233 | -639,189 | -1,294,192 |
| Depreciation of property, plant and equipment | -22,908 | -19,049 | -45,269 | -36,469 | -88,239 |
| Amortization of intangible fixed assets | -41,310 | -31,878 | -79,740 | -61,497 | -137,394 |
| Unrealized exchange-rate gains/losses (net) | -40 | -1,530 | -222 | -2,293 | -1,896 |
| TOTAL EXPENSES | -713,053 | -580,261 | -1,306,835 | -1,095,334 | -2,249,867 |
| EBITA | 264,385 | 226,158 | 484,458 | 411,617 | 876,110 |
| Acquisition-related costs | -466 | -1,395 | -1,875 | -11,372 | -38,040 |
| Acquisition-related amortization | -67,734 | -60,890 | -133,403 | -113,763 | -247,953 |
| OPERATING PROFIT/LOSS | 196,184 | 163,873 | 349,180 | 286,482 | 590,117 |
| Financial income | 2,464 | 924 | 5,275 | 4,095 | 6,051 |
| Financial expenses | -33,355 | -21,880 | -66,510 | -41,275 | -99,195 |
| Other financial income and expenses | -11,862 | -14,208 | -19,147 | -19,280 | -29,161 |
| TOTAL FINANCIAL ITEMS | -42,753 | -35,164 | -80,382 | -56,460 | -122,305 |
| PROFIT AFTER FINANCIAL ITEMS | 153,431 | 128,709 | 268,798 | 230,022 | 467,812 |
| Tax | -33,982 | -31,839 | -63,804 | -56,009 | -128,629 |
| NET PROFIT FOR THE PERIOD | 119,450 | 96,870 | 204,994 | 174,013 | 339,183 |
| Profit for the period attributable to: | |||||
| Parent Company shareholders | 119,450 | 96,870 | 204,994 | 174,013 | 339,183 |
| EARNINGS PER SHARE (SEK) | |||||
| Earnings per share before dilution (SEK) | 3.18 | 2.59 | 5.46 | 4.66 | 9.07 |
Consolidated statement of comprehensive income
| 2024 Apr–Jun |
2023 Apr–Jun |
2024 Jan–Jun |
2023 Jan–Jun |
2023 Jan–Dec |
|
|---|---|---|---|---|---|
| PROFIT FOR THE YEAR | 119,450 | 96,870 | 204,994 | 174,013 | 339,183 |
| Other comprehensive income | |||||
| Items that may be restated in profit or loss | |||||
| Restatement of net investments in foreign operations | -84,603 | 245,264 | 140,654 | 279,524 | -107,827 |
| Net investment hedges for foreign operations | 35,092 | -88,446 | -62,044 | -121,065 | 41,429 |
| Deferred tax on net investment hedges for foreign operations | -7,229 | 18,220 | 12,781 | 24,939 | -8,534 |
| Total items that may be restated in profit or loss | -56,740 | 175,038 | 91,391 | 183,398 | -74,932 |
| TOTAL OTHER COMPREHENSIVE INCOME/LOSS | -56,740 | 175,038 | 91,391 | 183,398 | -74,932 |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 62,710 | 271,908 | 296,385 | 357,411 | 264,251 |
| Total comprehensive income attributable to: | |||||
| – Parent Company shareholders | 62,710 | 271,908 | 296,385 | 357,411 | 264,251 |
Condensed consolidated statement of financial position
| SEK THOUSANDS | June 30, 2024 |
June 30, 2023 |
December 31, 2023 |
|---|---|---|---|
| ASSETS | |||
| FIXED ASSETS | |||
| Goodwill | 4,153,267 | 3,688,591 | 3,962,672 |
| Other intangible fixed assets | 3,044,682 | 2,815,005 | 2,915,147 |
| Tangible property, plant and equipment | 146,815 | 154,152 | 162,687 |
| Financial fixed assets | 48,920 | 55,943 | 43,590 |
| Deferred tax assets | 8,137 | 16,444 | 7,320 |
| TOTAL FIXED ASSETS | 7,401,820 | 6,730,135 | 7,091,416 |
| CURRENT ASSETS | |||
| Inventories | 3,903 | 3,227 | 4,645 |
| Current receivables | 489,943 | 366,928 | 561,432 |
| Cash and cash equivalents | 276,271 | 396,584 | 171,851 |
| TOTAL CURRENT ASSETS | 770,117 | 766,738 | 737,928 |
| TOTAL ASSETS | 8,171,937 | 7,496,874 | 7,829,344 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Equity attributable to Parent Company shareholders | 3,570,714 | 3,489,560 | 3,407,634 |
| Non-current portion of interest-bearing liabilities | 2,061,280 | 1,751,014 | 2,148,936 |
| Deferred tax liabilities | 611,637 | 528,268 | 584,977 |
| Other non-current liabilities | 674,433 | 813,119 | 657,758 |
| TOTAL NON-CURRENT LIABILITIES | 3,347,350 | 3,092,401 | 3,391,671 |
| Accounts payable | 72,277 | 36,767 | 57,274 |
| Current portion of interest-bearing liabilities | 146,056 | 34,793 | 13,363 |
| Other current liabilities | 380,430 | 244,598 | 498,336 |
| Accrued expenses | 290,401 | 267,049 | 191,955 |
| Prepaid recurring revenues | 364,709 | 331,706 | 269,111 |
| TOTAL CURRENT LIABILITIES | 1,253,874 | 914,913 | 1,030,039 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 8,171,937 | 7,496,874 | 7,829,344 |
Condensed consolidated statement of changes in equity
| SEK THOUSANDS | 2024 Apr–Jun |
2023 Apr–Jun |
2024 Jan–Jun |
2023 Jan–Jun |
2023 Jan–Dec |
|---|---|---|---|---|---|
| EQUITY ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS | |||||
| Opening balance | 3,624,496 | 3,295,492 | 3,407,634 | 3,209,758 | 3,209,758 |
| Correction of error attributable to previous year | - | - | - | 50 | -13,409 |
| Convertible debenture with stock options | 276 | 133 | 527 | 133 | 1,195 |
| Debenture conversion | 2,430 | 13,476 | 2,430 | 13,476 | 34,982 |
| Issuing costs | -80 | - | -80 | - | -273 |
| Paid option premiums | - | - | - | - | 21 |
| Long-term incentive program | 2,372 | - | 5,057 | - | 5,357 |
| Repurchase of treasury shares | - | - | -21,260 | - | -7,527 |
| Reserved dividend | -93,416 | -70,152 | -70,510 | -51,307 | -4,060 |
| Paid dividend | -28,074 | -21,298 | -49,469 | -39,962 | -82,661 |
| Total comprehensive income | 62,710 | 271,908 | 296,385 | 357,411 | 264,251 |
| CLOSING BALANCE | 3,570,714 | 3,489,560 | 3,570,714 | 3,489,560 | 3,407,634 |
Condensed consolidated statement of cash flow
| 2024 | 2023 | 2024 | 2023 | 2023 | |
|---|---|---|---|---|---|
| SEK THOUSANDS OPERATING ACTIVITIES |
Apr–Jun | Apr–Jun | Jan–Jun | Jan–Jun | Jan–Dec |
| Operating profit | 196,184 | 163,873 | 349,180 | 286,482 | 590,117 |
| Adjustments for non-cash items | |||||
| Depreciation, amortization and impairment | 131,952 | 111,816 | 258,411 | 211,729 | 473,586 |
| Unrealized foreign exchange gains/losses | 40 | 1,530 | 222 | 2,293 | 1,896 |
| 328,176 | 277,219 | 607,813 | 500,504 | 1,065,599 | |
| Interest received | 2,464 | 924 | 5,275 | 4,095 | 6,051 |
| Interest paid | -30,089 | -21,537 | -59,969 | -40,180 | -93,969 |
| Income tax paid | -27,726 | -9,272 | -64,581 | -42,495 | -109,795 |
| CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN | 272,825 | 247,334 | 488,538 | 421,924 | 867,886 |
| WORKING CAPITAL | |||||
| Changes in working capital | |||||
| Increase/decrease in inventories | 666 | 226 | 784 | 471 | -947 |
| Increase/decrease in accounts receivable | 27,819 | 3,043 | 202,915 | 141,267 | -81,596 |
| Increase/decrease in other current receivables | -74,343 | 8,248 | -109,299 | -66,328 | 31,463 |
| Increase/decrease in accounts payable | 5,751 | -3,937 | 7,543 | -21,376 | -10,075 |
| Increase/decrease in other current liabilities | -143,841 | -175,277 | 192,282 | 92,582 | -88,320 |
| CASH FLOW FROM OPERATING ACTIVITIES | 88,877 | 79,637 | 782,763 | 568,539 | 718,411 |
| INVESTING ACTIVITIES | |||||
| Acquisition of shares and participations | -1,782 | -7,274 | -5,013 | -15,902 | -15,902 |
| Acquisition of subsidiaries (net impact on liquidity) | -56,686 | -15,367 | -98,928 | -529,805 | -1,038,680 |
| Supplementary purchase considerations paid | -229,129 | -227,508 | -229,129 | -247,027 | -247,027 |
| Purchase of intangible fixed assets and capitalized development costs | -96,337 | -83,176 | -198,300 | -171,456 | -351,132 |
| Purchase of property, plant and equipment | -1,168 | -6,442 | -3,829 | -10,375 | -25,827 |
| CASH FLOW FROM INVESTING ACTIVITIES | -385,102 | -339,767 | -535,199 | -974,565 | -1,678,568 |
| FINANCING ACTIVITIES | |||||
| Dividends to Parent Company shareholders | -28,074 | -21,298 | -49,469 | -39,962 | -82,661 |
| Borrowings | - | - | - | 552,110 | 984,652 |
| Repayment of loans | -688 | -152,972 | -1,376 | -335,652 | -337,028 |
| Repayment of lease liabilities | -18,128 | -16,640 | -36,086 | -30,229 | -67,270 |
| Issuing costs | -80 | - | -80 | - | -273 |
| Acquisition of treasury shares | - | - | -21,260 | - | -7,527 |
| Paid option premiums | - | - | - | - | 11 |
| CASH FLOW FROM FINANCING ACTIVITIES | -46,970 | -190,910 | -108,271 | 146,266 | 489,904 |
| CASH FLOW FOR THE PERIOD | -343,195 | -451,040 | 139,293 | -259,760 | -470,255 |
| OPENING CASH AND CASH EQUIVALENTS, INCLUDING CURRENT INVESTMENTS |
639,987 | 822,784 | 171,851 | 615,787 | 615,787 |
| Exchange-rate differences in cash and cash equivalents | -20,521 | 24,842 | -34,873 | 40,557 | 26,319 |
| CASH AND CASH EQUIVALENTS INCLUDING CURRENT INVESTMENTS AT THE END OF THE PERIOD |
276,271 | 396,584 | 276,271 | 396,584 | 171,851 |
Condensed income statement, Parent company
| SEK THOUSANDS | 2024 Apr–Jun |
2023 Apr–Jun |
2024 Jan–Jun |
2023 Jan–Jun |
2023 Jan–Dec |
|---|---|---|---|---|---|
| Operating revenues | 49,014 | 43,356 | 94,058 | 83,578 | 177,820 |
| Operating expenses | -38,629 | -39,009 | -73,140 | -74,817 | -146,232 |
| Unrealized exchange-rate gains/losses (net) | 35,090 | -88,289 | -62,036 | -122,206 | 39,729 |
| OPERATING PROFIT/LOSS | 45,475 | -83,942 | -41,118 | -113,445 | 71,316 |
| Income from participation in Group companies | 5,867 | - | 5,867 | - | 320,430 |
| Interest income and similar profit items | 2,356 | 922 | 5,034 | 3,893 | 5,635 |
| Interest expenses and similar loss items | -32,927 | -21,354 | -65,608 | -39,925 | -96,646 |
| PROFIT AFTER FINANCIAL ITEMS | 20,771 | -104,374 | -95,825 | -149,477 | 300,734 |
| Appropriations | - | - | - | - | 79,048 |
| PROFIT/LOSS BEFORE TAX | 20,771 | -104,374 | -95,825 | -149,477 | 379,782 |
| Tax | -3,141 | 21,379 | 20,749 | 31,093 | -24,942 |
| NET PROFIT FOR THE PERIOD | 17,630 | -82,995 | -75,076 | -118,384 | 354,840 |
Profit/Loss for the period corresponds to total comprehensive income.
Condensed balance sheet, Parent Company
| SEK THOUSANDS | June 30, 2024 |
June 30, 2023 |
December 31, 2023 |
|---|---|---|---|
| ASSETS | |||
| FIXED ASSETS | |||
| Intangible fixed assets | 1,889 | 2,112 | 2,141 |
| Tangible property, plant and equipment | 10,385 | 10,588 | 10,646 |
| Financial fixed assets | 7,367,908 | 6,344,181 | 7,158,901 |
| TOTAL FIXED ASSETS | 7,380,182 | 6,356,881 | 7,171,687 |
| CURRENT ASSETS | |||
| Current receivables | 116,688 | 82,700 | 369,951 |
| Cash and cash equivalents | 71,467 | - | - |
| TOTAL CURRENT ASSETS | 188,155 | 82,700 | 369,951 |
| TOTAL ASSETS | 7,568,337 | 6,439,581 | 7,541,638 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | 3,100,891 | 2,801,978 | 3,331,352 |
| Untaxed reserves | 1,638 | 1,686 | 1,638 |
| Other provisions | 665 | 517 | 684 |
| Overdraft facility | - | 4,457 | - |
| Non-current liabilities | 2,757,266 | 2,568,335 | 2,834,654 |
| Current liabilities | 1,707,877 | 1,062,608 | 1,373,309 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 7,568,337 | 6,439,581 | 7,541,638 |
Acquired assets and liabilities 2024
During the first half of 2024, two acquisitions were completed: LDC I-talent Solutions B.V. and Bidtheatre AB. Some items in the acquisition plan may be remeasured, due to our brief ownership of the companies. This applies to all assets and liabilities in the acquisition
balances, but mainly brands, product rights, customer agreements and goodwill. For this reason, the acquisition plans remain preliminary, until 12 months after the acquisition date.
| Fair value | Fair value recognized in the Group |
|
|---|---|---|
| - | 106,854 | 106,854 |
| 3,622 | 92,233 | 95,855 |
| 277 | - | 277 |
| - | - | - |
| 34 | - | 34 |
| 22,126 | - | 22,126 |
| 35,966 | - | 35,966 |
| - | -21,492 | -21,492 |
| -7,460 | - | -7,460 |
| -35,187 | - | -35,187 |
| 19,378 | 177,595 | 196,973 |
| Book value | adjustment |
| Effect of acquisitions on cash flow, SEK thousands | |
|---|---|
| Group's purchase costs | -196,973 |
| Expensed portion of purchase considerations | 55,801 |
| Convertible debentures | 14,313 |
| Acquired cash and cash equivalents | 35,966 |
| Net cash outflow | -90,893 |
Acquired assets and liabilities, revaluations of previous years' acquisitions within 12 months
| Revaluation acquisition plan, SEK thousands | Initial valuation | Revaluation | Final valuation |
|---|---|---|---|
| Goodwill | 322,470 | 8,032 | 330,502 |
| Intangible assets | 156,953 | 156,953 | |
| Deferred tax liabilities | -31,391 | -31,391 | |
| Other net assets | 102,224 | 102,224 | |
| Total | 550,257 | 8,032 | 558,288 |
Effect of revaluation on cash flow for the year, SEK thousands
| Group's purchase costs | -8,032 |
|---|---|
| Expensed portion of purchase considerations | - |
| Convertible debentures | - |
| Acquired cash and cash equivalents | - |
| Cash flow for the year | -8,032 |
Allocation of revenues and date of revenue recognition
| Allocation of revenues and date of revenue recognition, SEK million | 2024 Apr–Jun |
2023 Apr–Jun |
2024 Jan–Jun |
2023 Jan–Jun |
2023 Jan–Dec |
|---|---|---|---|---|---|
| Subscription-based revenues | 519.7 | 544.3 | 1,023.0 | 901.4 | 1,872.5 |
| Transaction-based revenues | 254.8 | 68.1 | 367.8 | 220.0 | 473.5 |
| Other revenues | 107.7 | 111.2 | 207.4 | 214.9 | 431.6 |
| Net sales | 882.2 | 723.6 | 1,598.2 | 1,336.3 | 2,777.6 |
| Date of revenue recognition | |||||
| Services transferred to customers over time, flat distribution | 519.7 | 460.4 | 1,023.0 | 901.4 | 1,872.5 |
| Services transferred to customers over time, in pace with use | 339.3 | 236.8 | 538.2 | 391.5 | 816.8 |
| Services transferred to customers at a given time | 23.2 | 26.4 | 37.0 | 43.4 | 88.3 |
| Net sales | 882.2 | 723.6 | 1,598.2 | 1,336.3 | 2,777.6 |
Revaluation acquisition plan, SEK thousands Initial valuation Revaluation
Group's purchase costs -8,032 Expensed portion of purchase considerations - Convertible debentures - Acquired cash and cash equivalents - Cash flow for the year -8,032
Effect of revaluation on cash flow for the year, SEK thousands
Goodwill 322,470 8,032 330,502 Intangible assets 156,953 156,953 Deferred tax liabilities -31,391 -31,391 Other net assets 102,224 102,224 Total 550,257 8,032 558,288
Final valuation
Shareholder information
PUBLICATION
This information is such information that Vitec Software Group AB (publ.) is required to disclose pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication, through the agency of the contact person set out below, at 8:00 a.m. (CET) on July 12, 2024.
This report has not been subject to review by the company's auditors.
This English version of the report is a translation of the original Swedish version in the event of variances the Swedish version shall take precedence over the English translation.
FINANCIAL INFORMATION
Our website, vitecsoftware.com, is our primary channel for IR information, where we publish financial information immediately upon release.
We can also be contacted through the following channels: By post: Vitec Software Group, Vitec Investor Relations, Tvistevägen 47 A, SE-907 29 Umeå, Sweden By telephone: +46 90 15 49 00
Vitec's 2023 annual report is available at vitecsoftware.com
CORPORATE REGISTRATION NUMBER
Vitec Software Group AB (publ), corp. reg. no. 556258-4804
FINANCIAL CALENDAR
Interim report January–September 2024 Oct 17, 2024 8:00 a.m. (CET)
January–December 2024
Year-end report Feb 5, 2025 8:00 a.m. (CET)
Olle Backman CEO +46 70 632 89 93 [email protected]
Sara Nilsson CFO +46 70 966 00 71 [email protected]
Patrik Fransson Investor Relations +46 76 76 942 85 97 [email protected]
Definitions of key indicators
This interim report refers to several financial measurements that are not defined under IFRS, known as alternative performance measures, in accordance with ESMA's is called alternative. These measurements provide senior management and investors with significant information for analyzing trends in the company's business operations. Alternative performance measures are not always comparable with measurements used by other companies. They are
intended to complement, not replace, financial measurements presented in accordance with IFRS. The key indicators presented on the last page of this report are defined as follows:
| NON-IFRS KEY INDICATORS | DEFINITION | USAGE |
|---|---|---|
| Recurring revenues | Recurring contractual revenues with no direct relationship between our work efforts and the contracted price. The contractual amount is usually billed in advance and the revenues are recognized during the contract's term. |
A key indicator for the manage ment of operational activities. |
| Subscription-based recurring revenues |
Recurring, contractual recurring revenue for all types of subscriptions and cloud services. Revenue is evenly dis tributed over the contract period. |
Used to track the company's recurring revenues. |
| Transaction-based recurring revenues |
Recurring, contractual recurring transaction-based reve nue. Revenue is strongly linked to volume and varies by volume. |
Used to track the company's recurring revenues. |
| Percentage of recurring revenues |
Recurring revenues in relation to net sales. | A key indicator for the manage ment of operational activities. |
| Growth | The trend of the company's net sales in relation to corre sponding year-earlier period. |
Used to monitor the company's sales trend. |
| Growth in recurring revenues |
Trend in recurring revenues in relation to the previous corresponding year. |
Used to monitor the company's sales trend. |
| Organic growth in recurring revenues |
Development of the company's recurring revenue over the last 12 months, including data for acquired companies, in relation to corresponding year-earlier period. |
Used to monitor the company's sales trend. |
| Proforma net sales, rolling 12 months |
Net sales the past four quarters with addition of sales from acquired units for the time prior to the acquisition date. |
Used to monitor the company's sales trend. |
| ARR, Proforma recurring revenues, rolling 12 |
ARR, Annual Recurring Revenues. Recurring revenues the past four quarters with addition of recurring revenues from acquired units for the time prior to the acquisition date. |
Used to monitor the company's sales trend. |
| Gross profit | The company's sales less the cost of goods purchased for resale and subcontractors and subscriptions. |
Used to monitor the company's dependence on external direct costs |
| Gross margin | Gross profit in relation to net sales. | Used to monitor the company's dependence on external direct costs |
| EBITA | Net profit/loss for the period before acquisition-related costs, acquisition-related amortization, net financial items and tax. |
Indicates the company's net profit/loss for the period before acquisition-related costs, acquisi tion-related amortization. |
| EBITDA | Earnings before interest, tax, depreciation and amortization for the period. |
Indicates the company's operating profit/loss before depreciation/ amortization. |
| Acquisition-related costs | Costs such as broker fees, legal fees and stamp tax (tax on single property purchases). |
Used to disclose items affecting comparability. |
| Acquisition-related amortization |
Amortization regarding product rights and customer agree ments. |
Used to disclose items affecting comparability. |
| EBITA margin | Operating profit before acquisition-related costs in relation to net sales. |
Used to monitor the company's earnings trend. |
| Operating margin | Operating profit in relation to net sales. | Used to monitor the company's earnings trend. |
| NON-IFRS KEY INDICATORS | DEFINITION | USAGE |
|---|---|---|
| Profit margin | Profit after tax for the period, in relation to net sales. | Used to monitor the company's earnings trend. |
| Equity/assets ratio | Shareholders' equity, including equity attributable to non-controlling interests as a percentage of total assets. |
This measurement is an indica tor of the company's financial stability. |
| Equity/assets ratio after full conversion |
Shareholders' equity and convertible debentures as a per centage of total assets. |
This measurement is an indica tor of the company's financial stability. |
| Interest-bearing net debt | Non-current interest-bearing liabilities and the current portion of interest-bearing liabilities, less cash and cash equivalents. |
This measurement is an indica tor of the company's financial stability. |
| Debt/equity ratio | Average debt in relation to average shareholders' equity and non-controlling interests. |
This measurement is an indica tor of the company's financial stability. |
| Average shareholders' equity |
The average between shareholders' equity for the period attributable to Parent Company shareholders and share holders' equity for the preceding period attributable to Parent Company shareholders. |
An underlying measurement on which the calculation of other key indicators is based. |
| Return on capital employed | Profit after net financial items plus interest expenses, as a percentage of average capital employed. Capital employed is defined as total assets less interest-free liabilities and deferred tax. |
This measurement is an indicator of the company's profitability in relation to externally financed capital and shareholders' equity. |
| Return on equity | Reported profit/loss after tax in relation to average equity attributable to Parent Company shareholders. |
This measurement is an indicator of the company's profitability and gauges the return on sharehold ers' equity. |
| Sales per employee | Net sales in relation to the average number of employees. | This metric is used to assess the company's efficiency. |
| Added value per employee | Operating profit/loss plus depreciation/amortization and personnel expenses in relation to average number of em ployees. |
This metric is used to assess the company's efficiency. |
| Personnel expenses per employee |
Personnel expenses in relation to average number of em ployees. |
A key indicator used to measure operational efficiency. |
| Average no. of employees | The average number of employees in the Group during the period. |
An underlying measurement on which the calculation of other key indicators is based. |
| AES (Adjusted equity per share) |
Shareholders' equity attributable to Parent Company share holders, in relation to the number of shares issued at the balance-sheet date. |
This measurement indicates the equity per share at the bal ance-sheet date |
| Cash flow per share | Cash flow from operating activities before changes in working capital, in relation to the average number of shares. |
Used to monitor the company's trend in cash flow per share. |
| Number of shares after dilution |
Average number of shares during the period plus the num ber of shares added following full conversion of convert ibles and warrants. |
An underlying measurement on which the calculation of other key indicators is based. |
| IFRS KEY INDICATORS | DEFINITION | USAGE |
| Earnings per share | Profit after tax attributable to Parent Company sharehold ers, in relation to the average number of shares during the period. |
IFRS key indicators |
| Earnings per share after dilution |
Profit after tax attributable to Parent Company sharehold ers, plus interest expenses pertaining to convertible de bentures, in relation to the average number of shares after dilution, with the exception of when earnings per share after dilution exceeds earnings per share. |
IFRS key indicators |
Key indicators
| 2024 Jan–Jun |
2023 Jan–Jun |
2023 Jan–Dec |
|||
|---|---|---|---|---|---|
| Net sales | SEK 000s | 1,598,245 | 1,336,271 | 2,777,565 | |
| Recurring revenues | SEK 000s | 1,390,816 | 1,121,474 | 2,346,036 | |
| Recurring share of net sales | (%) | 87% | 84% | 84% | |
| Growth net sales | (%) | 20% | 49% | 40% | |
| EBITA | SEK 000s | 484,458 | 411,617 | 876,110 | |
| EBITA margin | (%) | 30% | 31% | 32% | |
| Growth EBITA | (%) | 18% | 65% | 51% | |
| Operating profit/loss (EBIT) | SEK 000s | 349,180 | 286,482 | 590,117 | |
| Operating margin | (%) | 22% | 21% | 21% | |
| Profit after financial items | SEK 000s | 268,798 | 230,022 | 467,812 | |
| Profit after tax | SEK 000s | 204,994 | 174,013 | 339,183 | |
| Profit margin | (%) | 13% | 13% | 12% | |
| Balance-sheet total | SEK 000s | 8,171,937 | 7,496,874 | 7,829,344 | |
| Equity/assets ratio | (%) | 44% | 47% | 44% | |
| Equity/assets ratio after full conversion | (%) | 46% | 49% | 46% | |
| Interest-bearing net debt | SEK 000s | 1,931,065 | 1,389,223 | 1,990,448 | |
| Debt/equity ratio | (multiple) | 1.22 | 1.04 | 1.14 | |
| Return on capital employed | (%) | 11% | 14% | 12% | |
| Return on equity | (%) | 10% | 13% | 10% | |
| Sales per employee | SEK 000s | 1,052 | 966 | 1,963 | |
| Added value per employee | SEK 000s | 871 | 830 | 1,693 | |
| Personnel expenses per employee | SEK 000s | 470 | 462 | 915 | |
| Average no. of employees | (persons) | 1,519 | 1,383 | 1,415 | |
| Adjusted equity per share (AES) | (SEK) | 95.12 | 93.39 | 90.78 | |
| Earnings per share | (SEK) | 5.46 | 4.66 | 9.07 | |
| Earnings per share after dilution | (SEK) | 5.46 | 4.60 | 9.07 | |
| Resolved dividend per share | (SEK) | 3.00 | 2.28 | 2.28 | |
| Cash flow per share | (SEK) | 13.01 | 11.30 | 23.21 | |
| Basis of computation: | |||||
| Earnings from calculation of earnings per share | SEK 000s | 204,994 | 174,013 | 339,183 | |
| Cash flow from calculation of cash flow per share |
SEK 000s | 488,538 | 421,924 | 867,886 | |
| Weighted average number of shares (weighted average) |
(thousands) | 37,538 | 37,338 | 37,389 | |
| Number of shares after dilution | (thousands) | 38,364 | 38,418 | 38,170 | |
| Number of shares issued at balance-sheet date | (thousands) | 37,541 | 37,365 | 37,535 | |
| Share price at close of the respective period | (SEK) | 550.00 | 542.00 | 585.50 |
Cover: Vitec Software Group develops and provides software for the food and grocery retail industry in Sweden.
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