Interim report, January – March 2022

JANUARY - MARCH

• Net sales amounted to MSEK 27.4 (24.3), rendering an all organic sales growth of 13%
• EBITDA amounted to MSEK 9.3 (8.7), rendering an EBITDA-margin of 34% (36)
• EBITA amounted to MSEK 8.0 (7.5) rendering an EBITA-margin of 29% (31)
• EBIT amounted to MSEK 6.0 (5.8) rendering an EBIT-margin of 22% (24)
• Profit after tax amounted to MSEK 4.7 (4.4). Earnings per share before and after dilution amounted to SEK 0.28 (0.30)
• Cash flow from operating activities before changes in working capital amounted to MSEK 8.5 (7.9)
• The value of contracted annualised recurring revenues with deduction for terminated contracts, CARR, at the end of the period was MSEK 83.7 rendering an increase of 29% the last 12 months

CEO comment

Order intake
The value of our contracted annual recurring revenue, CARR, amounted to MSEK 83.7 as per March 31, 2022, corresponding to a growth of 29 percent over the last twelve months. Order intake during the quarter amounted to a net of MSEK 4.9 as compared to MSEK 3.2 in the same period 2021. It was mainly driven by orders from existing customers and one larger new customer.

Reported recurring revenue during the last twelve months amounted to MSEK 61.4 and the value of recurring revenue yet to be implemented amounted to MSEK 19.2.

Revenue and profitability
Organic revenue growth amounted to 13 percent during the first quarter of the year. Growth was negatively affected by the phase out of the Boplats product as of 31 December 2021, which we flagged in the previous interim report. The discontinuation decision was made in 2019 but will not have a full effect on earnings until now, as the last customer was decommissioned in December 2021. The decision to phase out legacy products was made as we chose to prioritize our two remaining platforms Property and Energy, where the focus is on developing scalable standard solutions.

Adjusted for Boplats, the organic growth in recurring revenues amounted to 20 percent, while our service revenues to some extents were affected by the onboarding of the recently hired consultants, and a slightly higher staff turnover than expected.

EBITDA in the first quarter 2022 amounted to MSEK 9.3 (margin of 34 percent) compared to MSEK 8.7 (36 percent) in the corresponding period 2021. The slightly lower margin is mainly attributable to the phase out of Boplats. The key to strengthening the EBITDA margin now lies in starting the MSEK 19.2 that have been contracted but not yet implemented.

CARR and reported revenue
The difference between CARR growth and growth in reported revenue is a result of the fact that we over the last year have sold more than we have managed to implement, despite a gradually increased pace of implementation. The difference grows particularly large when the contracted revenue is mainly attributable to platform shifts, as has been the case over the last few years. These shifts are projects of considerable magnitude that require a period of preparation. Also, the implementation process itself runs over several calendar months. As we now move towards selling more of our add-ons, where implementation is faster, the time between signed contract and started recurring revenue will become shorter.

Finally, it is important to remember that our unstarted CARR is something positive. It is an effect of high demand for our products and the fact that our customers have been willing to invest in the fairly extensive implementation projects that a platform shift entails.

Products
During the first quarter, our business area Property launched the new add-on Momentum CRM. With our CRM solution, we support customers in their growing tenant focus. Also, in a short amount of time, many customers have chosen our solution for digital signatures that was launched at the end of 2021.

Going forward, an important focus for both business areas is the phasing out of legacy products that many customers still use. We have already come a long way and aim to have reached this goal by the end of 2023, give or take.

Fast rate of implementation
To ensure we reach this target, we now implement contracted products at a high rate. When having fully rolled out our current CARR, our reported recurring revenue will increase by over MSEK 22 compared to the last 12 months. Please see the diagram on the first page.

Stable customer segment
Our customer base consists of property companies where rent income from Swedish rental apartments makes out a dominating share of total revenue, and therefore indirectly ours. This provides stability to continue developing our business even in insecure times.

This stability is complemented by the possibilities that digitalisation provides. We see great potential in continuing to develop our customers’ operations with innovative solutions and the industry’s best consulting on how to maximise leverage on product investments.

Richard Durlow, CEO