Quarterly Report • May 9, 2018
Quarterly Report
Open in ViewerOpens in native device viewer
1) See note 13 to the consolidated financial statements for alternative performance measures.
WEBSTEP ASA INTERIM REPORT Q1 2018 2
| (Amounts in NOK million) | Q1 2018 | Q1 2017 | YTD 2018 | YTD 2017 | FY 2017 |
|---|---|---|---|---|---|
| Sales revenues | 174.9 | 161.0 | 174.9 | 161.0 | 596.5 |
| EBITDA1) | 23.9 | 24.5 | 23.9 | 24.5 | 57.1 |
| EBITDA margin1) | 13.7% | 15.2% | 13.7% | 15.2% | 9.6% |
| EBITDA excl. non-recurring costs1) | 23.9 | 24.5 | 23.9 | 24.5 | 71.0 |
| EBITDA margin excl. non-recurring costs1) | 13.7% | 15.2% | 13.7% | 15.2% | 11.9% |
| Net profit | 17.7 | 15.8 | 17.7 | 15.8 | 33.9 |
| Net cash flow | 1.0 | (22.7) | 1.0 | (22.7) | (73.8) |
| Earnings per share (NOK) | 0.67 | 0.76 | 0.67 | 0.76 | 1.55 |
| Earnings per share, fully dilluted (NOK) | 0.67 | 0.76 | 0.67 | 0.76 | 1.55 |
| Number of employees, average (FTE) | 410 | 386 | 410 | 386 | 393 |
| Number of employees, end of period | 409 | 392 | 409 | 392 | 402 |
| Number of work days, Norway (excl. vacation) | 62 | 65 | 62 | 65 | 251 |
| Number of work days, Sweden (excl. vacation) | 63 | 64 | 63 | 64 | 251 |
| EBITDA per average employee1) (NOK 1000) | 58.3 | 63.5 | 58.3 | 63.5 | 145.3 |
| EBITDA per average employee excl. non-recurring costs1) (NOK 1000) | 58.3 | 63.5 | 58.3 | 63.5 | 180.7 |
1) See note 13 to the consolidated financial statements for alternative performance measures.
| (Amounts in NOK million) | Q1 2018 | Q1 2017 | YTD 2018 | YTD 2017 | FY 2017 |
|---|---|---|---|---|---|
| Sales revenues | 147.7 | 137.4 | 147.7 | 137.4 | 495.3 |
| EBITDA1) | 21.9 | 22.4 | 21.9 | 22.4 | 51.4 |
| EBITDA margin1) | 14.8% | 16.3% | 14.8% | 16.3% | 10.4% |
| EBITDA excl. non-recurring costs1) | 21.9 | 22.4 | 21.9 | 22.4 | 65.4 |
| EBITDA margin excl. non-recurring costs1) | 14.8% | 16.3% | 14.8% | 16.3% | 13.2% |
| Number of employees, average (FTE) | 349 | 324 | 349 | 324 | 331 |
| Number of employees, end of period | 351 | 328 | 351 | 328 | 342 |
| Number of work days, Norway (excl. vacation) | 62 | 65 | 62 | 65 | 251 |
| EBITDA per average employee1) (NOK 1000) | 62.8 | 69.2 | 62.8 | 69.2 | 155.4 |
| EBITDA per average employee excl. non-recurring costs1) (NOK 1000) | 62.8 | 69.2 | 62.8 | 69.2 | 197.5 |
| (Amounts in NOK million) | Q1 2018 | Q1 2017 | YTD 2018 | YTD 2017 | FY 2017 |
|---|---|---|---|---|---|
| Sales revenues | 27.2 | 23.6 | 27.2 | 23.6 | 101.2 |
| EBITDA1) | 2.0 | 2.2 | 2.0 | 2.2 | 5.7 |
| EBITDA margin1) | 7.4% | 9.1% | 7.4% | 9.1% | 5.6% |
| EBITDA excl. non-recurring costs1) | 2.0 | 2.2 | 2.0 | 2.2 | 5.7 |
| EBITDA margin excl. non-recurring costs1) | 7.4% | 9.1% | 7.4% | 9.1% | 5.6% |
| Number of employees, average (FTE) | 61 | 63 | 61 | 63 | 63 |
| Number of employees, end of period | 58 | 64 | 58 | 64 | 60 |
| Number of work days, Sweden (excl. vacation) | 63 | 64 | 63 | 64 | 251 |
| EBITDA per average employee1) (NOK 1000) | 32.9 | 34.3 | 32.9 | 34.3 | 89.7 |
| EBITDA per average employee excl. non-recurring costs1) (NOK 1000) | 32.9 | 34.3 | 32.9 | 34.3 | 89.7 |
1) See note 13 to the consolidated financial statements for alternative performance measures.
WEBSTEP ASA INTERIM REPORT Q1 2018 4
Average number of employees by quarter
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
7.1
EBITDA by quarter1 NOK million
19.9
24.5
23.9
19.5
14.0
5.5
1) IPO costs and other non-recurring items of NOK 14 million recorded in Q4 2017.
WEBSTEP ASA INTERIM REPORT Q1 2018 5
Webstep entered 2018 with a record high order book and increased capacity, which resulted in first quarter revenues of NOK 175 million and 8.6 per cent top line growth. Demand for core services remains high and drives high utilization and a continued strong order book.
Webstep ASA reports continued profitable growth in the first quarter of 2018 with total consolidated revenues of NOK 174.9 million, up 8.6 per cent from the same quarter last year.
Consolidated EBITDA for the first quarter amounted to NOK 23.9 million, slightly down from the corresponding quarter last year, mainly due to calendar effects. The EBITDA-margin was 13.7 per cent.
Consolidatet net profit for the first quarter was NOK 17.7 million, up from NOK 15.8 million in the same quarter last year. The improvement is primarily due to decrease in depreciations and reduced finance costs following the refinancing in the fourth quarter of 2017.
Total equity at 31 March was NOK 371.1 million (NOK 214.1 million) and included the dividend of NOK 1.50 per share, which was proposed by the board on 21 March.
Cash flow from operations in the quarter was NOK 23.9 million, up from NOK 15.4 million in the first quarter of 2017.
The strong market fundamentals and the high demand for Webstep's Core Services continued in the first quarter in all locations. The systematic and successful recruitment efforts are paying off and lay the basis for further profitable growth in 2018.
The market for recruitment of IT experts is competitive, driven by the high demand for digitisation and digitalisation expertise. Attracting talents and experts is a key success factor. The increase of headcount during the past quarters proves the value of Webstep's long term employer branding and recruitment efforts have paid off the past quarters.
Webstep has been ranked among the 10 best places to work consecutively over the last 11 years in Norway, as well as two years in Sweden.
In the recently published 2018 ranking, Webstep Norway was recognised as the second-best place to work among companies with 200 to 500 employees. The employer branding and recruitment activities continues steadily in both Norway and Sweden.
Webstep has a strong financial position and the outlook for 2018 remains robust and positive.
(Numbers in brackets refer to the corresponding reporting period/reporting date in 2017, unless otherwise specified)
First quarter consolidated revenues were NOK 174.9 million (NOK 161 million). The 8.6 per cent growth reflects increased revenue capacity following increased headcount and high utilisation of this capacity, offset by negative calendar effects.
Webstep's revenue model is based on hourly fees, with revenue capacity depending on the number of consultants and number of working days. Calendar effects may therefore cause differences in revenue capacity between quarters. The first quarter of 2018 had three working
days less in Norway and one day less in Sweden, than the same quarter in 2017. This due to the Easter holiday being in different quarters in the respective years. The first quarter also includes some vacation time, particularly in Norway.
Cost of services and goods sold amounted to NOK 17.3 million (NOK 10.6 million) for the quarter, reflecting normal variations in the mix of internal resources and subcontractors used in projects, as well as the utilisation of subcontractors to meet demand in Sweden.
Personnel expenses include salaries and benefits, pension, tax, vacation pay and other items. A high proportion of salary is variable. New consultants receive a guaranteed base salary in the onboarding phase, which is the main driver for higher personnel expenses in periods with high onboarding activity.
Salaries and personnel cost for the first quarter came to NOK 124.6 million (NOK 117.7 million) and reflect the increase in headcount since 2017.
EBITDA amounted to NOK 23.9 million (NOK 24.5 million). The slight decrease in EBITDA is mainly due to calendar effects (fewer working days than last year) and the increased use of subcontractors in Sweden.
Operating profit was NOK 23.3 million for the quarter (NOK 22.5 million). Depreciation and impairment dropped from NOK 2.1 million last year to NOK 0.6 million this year, mainly as a consequence of acquisition related customer relationships in Sweden being fully amortized in 2017. The other variations between 2017 and 2018 are explained above.
Net financial costs were NOK 0.4 million (NOK 1.7 million). The reduction is mainly related to the refinancing of the group in connection with the IPO in 2017. Income tax in the first quarter amounted to NOK 5.2 million (NOK 5 million). Net profit for the first quarter was NOK 17.7 million (NOK 15.8 million).
Total assets at 31 March amounted to NOK 536.3 million (NOK 556.7 million). Non-current assets were NOK 389.4 million (NOK 391.2 million) and mainly consisted of intangible assets. Intangible assets are primarily acquisition-related goodwill of NOK 378.0 million, which is impairment tested annually.
Total current assets of NOK 147.0 million (NOK 165.4 million) mainly consisted of trade receivables and cash and short-term deposits. Trade receivables at quarter end were NOK 132.4 million (NOK 104.3 million). The increase is primarily a consequence of 31 March 2018 falling on a Saturday, and concurrently being the due date for a significant part of the receivables. Such payments are normally registered as cash received after the weekend. Consequently, trade receivables dropped significantly in the first days of April. Approximately NOK 46.3 million were paid by 5 April 2018, leaving trade receivables at approximately NOK 86.1 million after this date.
Cash and short-term deposits amounted to NOK 7.5 million (NOK 57.6 million), impacted by the same effect as described above, with a NOK 46.3 million increase by 5 April when payments falling due on 31 March had been recorded in the bank account. The change in cash resources should also be seen in light of the net effect of debt repayment and share capital issue in connection with the IPO.
Total equity at 31 March was NOK 371.1 million (NOK 214.1 million). The change is mainly related earnings generated in 2017 and 2018 and the share capital issue in connection with the IPO in October 2017.
A dividend of NOK 1.50 per share was proposed by the board on 21 March and approved by the annual general meeting on 24 April. This is not reflected in the financial statements at 31 March, following IFRS practice (dividend proposals not to be presented as a liability until approved by the Annual General Meeting).
Non-current liabilities amounted to NOK
1.5 million (157.0 million). The debt reduction is a consequence of the new capital structure following the IPO. The current liabilities amounted to NOK 163.8 million (NOK 185.6 million). The changes are mainly due to reduced debt to credit institutions.
Webstep had a solid cash flow from operations in the quarter of NOK 23.9 million (NOK 15.4 million). The figure is impacted by the NOK 46.3 million accrual effect between cash/short term deposits and trade receivables as mentioned above.
Cash flow from investing activities was negative NOK 1.7 million (negative NOK 1.9 million).
Cash flow from financing activities was negative NOK 21.3 million (negative NOK 36.2 million). The decrease is partly attributable to the accrual effect mentioned above, and is also explained by the change of practice since 2017, from gross to net reporting of the company's bank balance. The effect of this change can be found in note 11 to the consolidated financial statements.
Webstep has two reporting segments; Norway and Sweden. Norway accounts for around ~84 per cent of total revenues.
Webstep Norway is located in Oslo, Bergen, Stavanger, Trondheim and Kristiansand and provides high-end IT consultancy services to more than 200 public and private clients. The core digitalisation offering consists of digitisation, cloud implementation, migration and integration. In addition, Webstep is steadily taking advantage of key fast-growing markets, including Internet of Things ("IoT"), machine learning and analytics.
Total operating revenues for the quarter came to NOK 147.7 million (NOK 137.4 million), an increase of 7.5 per cent from the corresponding quarter last year. There is a high demand for Webstep's core IT services.
EBITDA for the first quarter came to NOK 21.9 million (NOK 22.4 million), which represents an EBITDA margin of 14.8 per cent (16.3 per cent).
Revenue and profit growth in the first quarter was impacted by calendar effects due to Easter (three working days less than the same quarter 2017). This effect will be opposite in the second quarter.
Webstep Norway had 351 employees at the end of the first quarter (328 employees). The average number of employees in the quarter was 349 (324). Strong focus on recruitment has proven successful, and the high number of new employees onboarded in the past months has laid the basis for further profitable growth in 2018 in Norway.
The order intake and backlog for Webstep Norway is generally high, with particularly high demand for the core digitalisation services.
Webstep Sweden has offices in Stockholm and Malmö and serves more than
50 clients in different industries, mainly in the private sector. Webstep Sweden delivers the same high-end IT consultancy services as the Norwegian counterpart, primarily within the company's core digitalisation offering.
Total operating revenues for the first quarter were NOK 27.2 million (NOK 23.6 million), an increase of 15 per cent from the same quarter last year. The increase is mainly due to strong utilisation and client development, utilising subcontractors to build new client relations. Revenue and profit were negatively impacted by one working day less in the first quarter of 2018 compared to the same quarter last year. This effect will be opposite in the second quarter. EBITDA came to NOK 2.0 million (NOK 2.2 million), representing an EBITDA margin of 7.4 per cent (9.1 per cent). The weaker margin level in Sweden reflects the strategic use of subcontractors, which has enabled Webstep to increase revenue growth in Sweden and to build new client relationships. The strong focus on recruitment continues.
Webstep Sweden had 58 employees at the end of the first quarter (64 employees). The average number of employees in the quarter was 61 (63). The slight reduction in number of employees over the period is due to a very competitive candidate market in Sweden.
The order intake and backlog for Webstep Sweden continues to be strong.
The overall market outlook is robust, following the general trend with high investment activity in digitalisation of private and public sector. This is expected to drive continued high demand for Webstep's offering of IT expertise. The continued strong order book confirms the good momentum.
The high demand for Webstep's core services – digitisation, cloud and integration – is expected to continue. Cloud is also the main prerequisite for the use of data for IoT, machine learning and analytics. These are all expected to become important growth areas,
though still in an early phase. Investments in expertise and capacity in these services is therefore still highly prioritized, knowing that sales processes for new services generally take longer time. The company's ability to move consultants between New Services and Core Services is likely to increase utilisation somewhat. However, lower utilisation of the New Services experts should still be expected in a short-term perspective.
The recruitment and onboarding activity over the past quarters has resulted in a notable higher level of revenue capacity. However, the past quarters' growth in headcount is not likely to continue at the same high rate in the coming quarters. There is an increasingly competitive environment for recruiting IT-experts, with existing as well as new market players hunting the best people. As a consequence, employer branding, employee retention and recruitment will remain top priorities going forward.
The over-all ambition remains unchanged; profitable growth above market and maintaining EBITDA margin levels above the average market level, as demonstrated over the last years.
Klaus-Anders Nysteen Chair of the board
Siw Ødegaard Board member
Terje Bakken Board member
Bjørn Ivar Danielsen Board member
Toril Nag Board member
Kjetil Bakke Eriksen Chief Executive Officer
| Q1 | Q1 | Q1 YTD | Q1 YTD | Full year | ||
|---|---|---|---|---|---|---|
| (Amounts in NOK 1000) | Note | 2018 | 2017 | 2018 | 2017 | 2017 |
| Sales revenues | 174 865 | 161 011 | 174 865 | 161 011 | 596 519 | |
| Total revenues | 174 865 | 161 011 | 174 865 | 161 011 | 596 519 | |
| Cost of services and goods | 17 298 | 10 608 | 17 298 | 10 608 | 49 333 | |
| Salaries and personell cost | 124 648 | 117 654 | 124 648 | 117 654 | 448 395 | |
| Depreciation and impairment | 632 | 2 072 | 632 | 2 072 | 8 156 | |
| Other operating expenses | 8 987 | 8 203 | 8 987 | 8 203 | 41 705 | |
| Operating profit(loss) | 23 300 | 22 474 | 23 300 | 22 474 | 48 929 | |
| Net financial items | (400) | (1 757) | (400) | (1 757) | (8 565) | |
| Profit before tax | 22 900 | 20 717 | 22 900 | 20 717 | 40 364 | |
| Income tax expenses | 5 246 | 4 962 | 5 246 | 4 962 | 6 514 | |
| Profit for the period | 17 654 | 15 755 | 17 654 | 15 755 | 33 851 | |
| Earnings per share (NOK) | 6 | 0.67 | 0.76 | 0.67 | 0.76 | 1.55 |
| Earnings per share, fully diluted (NOK) | 6 | 0.67 | 0.76 | 0.67 | 0.76 | 1.55 |
| Other comprehensive income: | ||||||
| Currency translation differences | (4 608) | 659 | (4 608) | 659 | 3 544 | |
| Other comprehensive income for the period, net of tax | (4 608) | 659 | (4 608) | 659 | 3 544 | |
| Total comprehensive income for the period, net of tax | 13 046 | 16 415 | 13 046 | 16 415 | 37 395 | |
| Attributable to: | ||||||
| Shareholders in parent company | 13 046 | 16 415 | 13 046 | 16 415 | 37 395 |
| 31 Mar | 31 Mar | 31 Dec | ||
|---|---|---|---|---|
| (Amounts in NOK 1000) | Note | 2018 | 2017 | 2017 |
| ASSETS | ||||
| Non-current assets | ||||
| Intangible assets | 8 | 383 801 | 386 230 | 387 082 |
| Fixed assets | 5 337 | 3 238 | 5 228 | |
| Non-current financial assets | - | 1 444 | - | |
| Deferred tax asset | 232 | 320 | 232 | |
| Total non-current assets | 389 370 | 391 232 | 392 542 | |
| Current assets | ||||
| Trade receivables | 132 403 | 104 328 | 125 546 | |
| Other current receivables | 7 025 | 3 526 | 3 585 | |
| Cash and short-term deposits | 9 | 7 539 | 57 574 | 6 580 |
| Total current assets | 146 967 | 165 428 | 135 711 | |
| Total assets | 536 337 | 556 660 | 528 252 |
| 31 Mar | 31 Mar | 31 Dec | ||
|---|---|---|---|---|
| (Amounts in NOK 1000) | Note | 2018 | 2017 | 2017 |
| EQUITY | ||||
| Share capital | 26 967 | 21 256 | 26 967 | |
| Treasury shares | (610) | (610) | (610) | |
| Share premium | 149 837 | 32 108 | 149 827 | |
| Retained earnings | 194 868 | 161 319 | 181 554 | |
| Non-controlling interest | - | - | - | |
| Total equity | 371 062 | 214 073 | 357 738 | |
| LIABILITES | ||||
| Non-current liabilities | ||||
| Borrowings | 9 | - | 153 750 | - |
| Deferred tax | 1 517 | 3 278 | 1 616 | |
| Total non-current liabilities | 1 517 | 157 028 | 1 616 | |
| Debt to credit institutions | 9 | 3 027 | 31 250 | 24 287 |
| Trade and other payables | 14 150 | 9 411 | 16 659 | |
| Tax payable | 5 668 | 14 942 | 7 293 | |
| Dividends payable | ||||
| Social taxes and VAT | 61 375 | 51 898 | 49 255 | |
| Other short-term debt | 10 | 79 538 | 78 058 | 71 404 |
| Total current liabilities | 163 758 | 185 558 | 168 898 | |
| Total equity and liabilities | 536 337 | 556 660 | 528 252 |
| Q1 YTD | Q1 YTD | Full year | ||
|---|---|---|---|---|
| (Amounts in NOK 1000) | 2018 | 2017 | 2017 | |
| Operating activities | ||||
| Profit/(loss) before tax | 22 900 | 20 717 | 40 364 | |
| Adjustments for: | ||||
| Depreciation of property, plant and equipment | 632 | 2 072 | 8 156 | |
| Net change in trade and other receivables | (10 297) | (21 104) | (40 939) | |
| Net change in other liabilities | 17 744 | 19 023 | 16 975 | |
| Net foreign exchange differences | (52) | (80) | 693 | |
| Income tax expenses | (7 015) | (5 196) | (17 206) | |
| Net cash flow from operating activities | 23 912 | 15 432 | 8 043 | |
| Investing activities | ||||
| Payments for R&D initiative | 8 | (952) | (1 017) | (3 561) |
| Purchase of property and equipment | (741) | (919) | (4 456) | |
| Net cash flow from investing activities | (1 693) | (1 936) | (8 017) | |
| Financing activities | ||||
| Repayment of borrowings | - | (7 500) | (192 500) | |
| Change in bank overdraft | 11 | (21 260) | (28 733) | (4 446) |
| Net proceeds from equity | - | - | 123 189 | |
| Payment of dividends | - | - | - | |
| Net cash flows from financing activities | (21 260) | (36 233) | (73 758) | |
| Net increase/(decrease) in cash and cash equivalents | 958 | (22 737) | (73 731) | |
| Cash and cash equivalents at 1 January | 6 580 | 80 311 | 80 311 | |
| Cash and cash equivalents at end of period | 7 539 | 57 574 | 6 580 |
| Total | ||||||||
|---|---|---|---|---|---|---|---|---|
| Foreign | attributable | |||||||
| currency | to equity | Non | ||||||
| Issued | Treasury | Share | translation | Retained | owners | controlling | Total | |
| (Amounts in NOK 1000) | capital | shares | premium | reserve | earnings | parents | interest | equity |
| At 1 January 2017 | 21 256 | (610) | 32 109 | 8 847 | 135 316 | 196 918 | - | 196 918 |
| Profit for the period | - | - | - | - | 33 851 | 33 851 | - | 33 851 |
| Other comprehensive income/(loss) | - | - | - | 3 544 | - | 3 544 | - | 3 544 |
| Net purchase of treasury shares | - | - | - | - | - | - | - | - |
| Shared issued | 5 711 | - | 117 477 | - | - | 123 189 | - | 123 189 |
| Share incentive program | - | - | 237 | - | - | 237 | - | 237 |
| At 31 December 2017 | 26 967 | (610) | 149 823 | 12 391 | 169 167 | 357 738 | - | 357 738 |
| Profit for the period | - | - | - | - | 17 654 | 17 654 | - | 17 654 |
| Other comprehensive income/(loss) | - | - | - | (4 608) | - | (4 608) | - | (4 608) |
| Share incentive program | - | - | 278 | - | - | 278 | - | 278 |
| At 31 March 2018 | 26 967 | (610) | 150 101 | 7 783 | 186 821 | 371 062 | - | 371 062 |
Webstep ASA (the Company) is a Norwegian public limited liability company. The General Meeting held on 14 September 2017 resolved to transform the company from a private limited liability company to a public limited liability company and a name change from Azure Holding AS to Webstep ASA. The shares of the Company were listed on Oslo Stock Exchange on 11 October 2017.
The Company and its subsidiaries (together the Webstep Group/the Group) are leading providers of IT expert consultants in Norway and Sweden. The Group aims to be at the forefront of the technological development and to assist its customers in their digitalisation through the offering of cutting-edge IT expertise. The Group's core digitalisation offerings are digitalisation, cloud migration and integration, in addition to its other core focus areas Internet of Things (IoT), machine learning and analytics.
The financial statements are presented in NOK, rounded to the nearest thousand, unless otherwise stated. As a result of rounding adjustments, the figures in one or more rows or columns included in the financial statements and notes may not add up to the total of that row or column.
These condensed consolidated interim financial statements for the first quarter of 2018 have been prepared in accordance with IAS 34 as approved by the EU (IAS 34). They have not been audited or subject to a review by the auditor. They do not include all of the information required for full annual financial statements of the Group and should consequently be read in conjunction with the consolidated financial statements for 2017. The accounting policies applied are consistent with those applied and described in the consolidated annual financial statements for 2017, which are available on www.webstep.com and upon request from the Company's registered office at Lilleakerveien 8, 0283 Oslo, Norway.
These condensed consolidated interim financial statements for the first quarter 2018 were approved by the Board of Directors and the CEO on 8 May 2018.
The Group prepares its consolidated annual financial statements in accordance with IFRS as adopted by the EU (International Financial Reporting Standards - IFRS) and the Norwegian Accounting Act. References to IFRS in these accounts refer to IFRS as approved by the EU. The date of transition was 1 January 2016. The accounting policies adopted are consistent with those of the previous financial year.
At the time of approval for issue of these condensed consolidated interim financial statements, some new standards, amendments to standards and interpretations have been published, but are not yet effective and have therefore not been applied in preparing these consolidated financial statements. Those that may be relevant for the Group are described in note 1 to the annual consolidated financial statements for 2017.
The preparation of condensed consolidated interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the annual consolidated financial statements for 2017 and as described in note 2 to the 2017 statements.
The Group has two geographical reporting segments. Revenues and expenses are reported in the legal entity where they occur and hence reported in the segment in which the legal entity belongs. Segment performance is evaluated on the basis of revenue and EBITDA performance. Assets and liabilities are not allocated between the segments. Please refer to note 3 to the annual consolidated financial statements for 2017 for more information on the segments.
| Q1 | Q1 | Q1 YTD | Q1 YTD | Full year | |
|---|---|---|---|---|---|
| (Amounts in NOK 1000) | 2018 | 2017 | 2018 | 2017 | 2017 |
| Revenue | 147.7 | 137.4 | 147.7 | 137.4 | 495.3 |
| Total costs | 125.8 | 115.0 | 125.8 | 115.0 | 443.9 |
| EBITDA1) | 21.9 | 22.4 | 21.9 | 22.4 | 51.4 |
| EBITDA margin1) | 14.8% | 16.3% | 14.8% | 16.3% | 10.4% |
| SUMMARY P&L: SWEDEN | |||||
| Q1 | Q1 | Q1 YTD | Q1 YTD | Full year | |
| (Amounts in NOK 1000) | 2018 | 2017 | 2018 | 2017 | 2017 |
| Revenue | 27.2 | 23.6 | 27.2 | 23.6 | 101.2 |
| Total costs | 25.2 | 21.5 | 25.2 | 21.5 | 95.6 |
| EBITDA1) | 2.0 | 2.2 | 2.0 | 2.2 | 5.7 |
| EBITDA margin1) | 7.4% | 9.1% | 7.4% | 9.1% | 5.6% |
1) See note 13 for alternative performance measures.
The Group's net operating revenues are affected by the number of working days within each reporting period while employee expenses are recognised for full calendar days.
The number of working days in a month is affected by public holidays and vacations. The timing of public holidays' (e.g. Easter) during quarters and whether they fall on weekends or weekdays impacts revenues. Notable for the period is that Q1 2018 had three working days less in Norway and one working day less in Sweden, than the same quarter of 2017. The variance is a consequence of the Easter holidays in Q1 2018 and Q2 2017.
The first quarter of 2018 has dilutive effects on the number of shares due to the share program for the Group's employees. The program allows participants who purchased shares in the employee offering ("Saving Shares") in the IPO to receive shares ("Matching Shares") free of charge after a vesting period of two years, provided that they remain employed by the Group and retain all the purchased Saving Shares throughout the said vesting period. The potential dilution through this program accounts for approximately 107 000 shares.
At 31 March 2018, the Company had a total of 26 356 716 outstanding shares (excl. treasury shares).
| Q1 | Q1 | Q1 YTD | Q1 YTD | Full year | |
|---|---|---|---|---|---|
| (Amounts in NOK 1000) | 2018 | 2017 | 2018 | 2017 | 2017 |
| Profit for the period | 17 654 | 15 755 | 17 654 | 15 755 | 33 851 |
| Average number of shares (excl. treasury shares) | 26 357 | 20 645 | 26 357 | 20 645 | 21 879 |
| Average number of shares, fully diluted (excl. treasury shares) | 26 464 | 20 645 | 26 464 | 20 645 | 21 906 |
| Earnings per share | 0.67 | 0.76 | 0.67 | 0.76 | 1.55 |
| Earnings per share, fully diluted | 0.67 | 0.76 | 0.67 | 0.76 | 1.55 |
The Group's financial instruments are primarily trade receivables and other receivables, cash and cash equivalents and accounts payables, for which the book value is a good approximation of fair value.
The Group's interest-bearing liabilities are mainly debt to credit institutions, amounting to NOK 3 million (NOK 31 million).
The Group owns a limited amount of treasury shares at quarter end (0.6 million), booked at face value.
Intangible assets mainly consist of goodwill arisen from Webstep ASA's acquisitions of Webstep AS (Norway) in 2011 and Webstep AB in 2012/2013 (Sweden) and investments in R&D.
| Net book value (NOK 1000) | 31 Mar 18 | 31 Mar 17 | 31 Dec 17 |
|---|---|---|---|
| Goodwill | 378 038 | 379 673 | 382 271 |
| Customer relationship | - | 4 432 | - |
| Research and development | 5 763 | 2 126 | 4 811 |
| Total | 383 801 | 386 230 | 387 082 |
| Presented in quarterly reports in 2017 Net book value (NOK 1000) |
31 Mar 18 | 31 Mar 17 | 31 Dec 17 |
| Goodwill Customer relationship Research and development |
378 038 - 5 763 |
379 673 4 432 - |
382 271 - 4 811 |
| Total | 383 801 | 384 105 | 387 082 |
For further details, please refer to note 10 to the Company's consolidated annual financial statements for 2017.
Net proceeds of NOK 123 million from new equity issued in the IPO was used to partly repay a former long-term loan (balance of NOK 170 million at 30 September 2017). The remainder of the loan was converted to a new credit facility as described below.
A NOK 110 million Revolving Credit Facility ("RCF") with SpareBank 1 SR-Bank ASA was entered into by the Company in connection with the IPO process. The RCF became effective on 11 October 2017 upon (i) completion of the offering with minimum gross proceeds from the offer of the New Shares of NOK 100 million, (ii) repayment and cancellation of the former Senior Facility Arrangement and (iii) cancellation of the former Overdraft Facility of NOK 40 million. The RCF may be utilised by each member of the Group having acceded to the cash pooling account system related to the RCF.
The term of the RCF is two years, after which it is subject to renewal. The total payable interest rate is based on 3 months NIBOR in addition to an agreed margin of 2.85% per annum. The interest calculation is based on the net of cash and overdraft. The quarterly charge for the credit facility is 0.25% of the granted credit. Under the RCF, the Company have pledged security over the shares, inventory, insurance payouts and accounts receivable in Webstep AS and negative pledge over the shares in Webstep AB. The covenants for the RCF are: 1) Group equity ratio >30 per cent, measured quarterly, and 2) NIBD / EBITDA ratio maximum 3, measured quarterly, rolling 12 months.
With the refinancing of the debt structure, new bank agreements were entered into. The new agreements include a cash pooling account system in the Norwegian operation, which implies a change in how the Group reports cash, short term deposits and bank overdraft. These figures have previously been reported separately under assets and debt respectively, and are now reported as one net figure, either asset or debt, depending on the net figure, to reflect the actual interest-bearing figure at balance date.
Other short-term debt mainly consists of two components; 1) accrued salaries for the past month, for payment to employees in accordance with the salary model and 2) accrued holiday pay as required by law, for payment to employees in June every year.
As described in note 9, the Group has changed the reporting of cash, short term deposits and bank overdraft from gross assets and debt figures to one net asset or debt figure. Accordingly, the cash flow statement for Q1 2017 has been restated to ease comparison:
| Operating activities Profit/(loss) before tax |
22.9 | 20.7 | 40.4 | 20.7 |
|---|---|---|---|---|
| Adjustments for: | - | - | - | - |
| Depreciation of property, plant and equipment | 0.6 | 2.1 | 8.2 | 2.1 |
| Net change in trade and other receivables | (10.3) | (21.1) | (40.9) | (21.1) |
| Net change in other liabilities | 17.7 | 19.0 | 17.0 | 19.0 |
| Net foreign exchange differences | (0.1) | (0.1) | 0.7 | (0.1) |
| Income tax expenses | (7.0) | (5.2) | (17.2) | (5.2) |
| Net cash flow from operating activities | 23.9 | 15.4 | 8.0 | 15.4 |
| CONSOLIDATED STATEMENT OF CASH FLOWS (contd.) | Restated | |||
|---|---|---|---|---|
| Q1 YTD | Q1 YTD | Full year | Q1 YTD | |
| (Amounts in NOK million) | 2018 | 2017 | 2017 | 2017 |
| Investing activities | ||||
| Payments for R&D initiative | (1.0) | (1.0) | (3.6) | (1.0) |
| Purchase of property and equipment | (0.7) | (0.9) | (4.5) | (0.9) |
| Net cash flow from investing activities | (1.7) | (1.9) | (8.0) | (1.9) |
| Financing activities | ||||
| Proceeds from borrowings | - | - | - | - |
| Repayment of borrowings | - | (7.5) | (192.5) | (7.5) |
| Change in bank overdraft | (21.3) | (28.7) | (4.4) | - |
| Net proceeds from equity | - | - | 123.2 | - |
| Purchase of treasury shares | - | - | - | - |
| Payment of dividends | - | - | - | - |
| Payment of seller credit | - | - | - | - |
| Unrealized value of financial instruments | - | - | - | - |
| Net cash flows from financing activities | (21.3) | (36.2) | (73.8) | (7.5) |
| Net increase/(decrease) in cash and cash equivalents | 1.0 | (22.7) | (73.7) | 6.0 |
| Cash and cash equivalents at 1 January | 6.6 | 80.3 | 80.3 | 51.6 |
| Cash and cash equivalents at end of period | 7.5 | 57.6 | 6.6 | 57.6 |
A dividend of NOK 1.50 per share, corresponding to a total dividend of NOK 39.5 million was proposed by the Board of Directors on 21 March and approved by the annual general meeting on 24 April. The dividend proposal is not reflected in the financial statements at 31 March, following IFRS practice (dividend proposals not to be presented as a liability until approved by the Annual General Meeting).
Webstep discloses alternative performance measures as a supplement to the financial statements prepared in accordance with IFRS. Webstep believes that the alternative performance measures provide useful supplemental information to management, investors, equity analysts and other stakeholders. These measures are commonly used and are meant to provide an enhanced insight into the financial development of Webstep's business operations and to improve comparability between periods.
EBITDA is short for Earnings before Interest and other financial items, Taxes, Depreciation and Amortisation and is a term commonly used by analysts and investors.
EBITDA excl. non-recurring costs is Earnings before Interest and other financial items, Taxes, Depreciation and Amortisation excluding impact of non-recurring items as specified when such costs occur.
EBITDA per employee is Earnings before Interest and other financial items, Taxes, Depreciation and Amortisation divided by the average number of employees.
EBITDA per employee excl. non-recurring costs is Earnings before Interest and other financial items, Taxes, Depreciation and Amortisation excluding impact of non-recurring items as specified when such costs occur.
Visitor address: Lilleakerveien 8 NO-0283 OSLO NORWAY
PB 272 Lilleaker NO-0216 Oslo NORWAY
Anders Løken E: [email protected] T: +47 977 69 200
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.