Third quarter summary, July – September 2016
- Net sales amounted to SEK 467.1 m (467.3)
- EBITA was SEK 39.6 m (42.2), corresponding to an EBITA margin of 8.5 per cent (9.0)
- Operating profit was SEK 24.6 m (30.8), corresponding to an operating margin of 5.3 per cent (6.6)
- Profit after tax was SEK 17.2 m (21.7)
- Earnings per share after dilution were SEK 0.57 (0.71)
- Cash flow from operating activities was SEK -37.2 m (-18.0)
Nine-month summary, January – September 2016
- Net sales amounted to SEK 1,536.3 m (1,286.4), up 19%
- EBITA increased to SEK 107.2 m (98.5), corresponding to an EBITA margin of 7.0 per cent (7.7)
- Operating profit was SEK 66.1 m (68.0), corresponding to an operating margin of 4.3 per cent (5.3)
- Profit after tax was SEK 45.5 m (50.0)
- Earnings per share after dilution were SEK 1.50 (1.67)
- Cash flow from operating activities was SEK 84.8 m (45.8)
Significant events during the third quarter, July – September 2016
- Acquisition of software companies EssVision and Stamford
- Establishment of new software company specialising in e-health and pharmacy solutions
- Clearance obtained to sign agreement with the City of Gothenburg after appeal for review was denied, order
- value of approximately SEK 35 m
- Agreement signed with a major government agency in the area of defence and security, order value of approximately SEK 5 m
Significant events after the end of the reporting period
- Agreement with world-leading train manufacturer
- Additional acquisition credit facility of SEK 200 m secured
- Johan Andersson appointed new President and CEO from AGM 2017 and Staffan Hanstorp proposed as new Chairman of the Board
CEO comment's
New CEO and I am proposed as Chairman of the Board
Size and offering leading to new business
Through our expansion in recent years we have attained a strong position in the Nordic countries as well as internationally. The acquisition of the British company Symetri in 2014 and the German company Transcat PLM in 2015 have given us a solid European base for our continued growth in industrial IT. This broader geographical spread is unleashing new potential for business' and collaborations with major international customers. A prime example is the contract we signed after the end of the quarter with Stadler, the Swiss train manufacturer. In the public sector, too, we are winning new deals that are a testimony to both our quality and prestige. During the quarter we obtained clearance following an appeal process to sign an agreement with the City of Gothenburg for a new planning system for the city's home care operations. We also secured a deal with a major government agency in the defense and security sector, where we will implement our case management software.
Change in design management business model taking hold
We achieved growth of 19 per cent for the nine-month period, driven by organic growth as well as acquisitions. Both net sales and EBITA for the third quarter were level with the corresponding period a year ago. As previously communicated, we have shifted to a new business model in our subsidiary Symetri from a licence-based sales model to one that is now entirely subscription-based. In the near term this transition is affecting both sales and earnings, however, over time the change will provide us with a higher share of recurring revenue and greater stability in our business. Taking these factors into account we had a good quarter.
Acquisition of two software companies
We are seeing steady growth in revenue from our proprietary products, and during the third quarter we acquired another two software companies that strengthen us in the area of case management. Every day we evaluate acquisition candidates, and to ensure that we can take advantage of every opportunity, we have secured an additional acquisition credit facility worth SEK 200 m. By successively evaluating, acquiring and developing companies in our two core businesses, we are moving forward at a steady pace.
Change of leadership by AGM 2017
For 23 years I have been active within the company. In 1994 I paved the ground to Addnode Group's largest business of today and the last ten years I have been the President and CEO for a Nasdaq listed company. We have built a solid and profitable Group with a turnover of more than two billion SEK. Timing and place feels right to change leadership and for me to step into a new position. Current CFO in the Group, Johan Andersson, will overtake my responsibilities as President and CEO from AGM 2017 and I am proposed to the position as Chairman of the Board of Directors. I will continue to be a driving force in overall strategic questions and remain an active part in acquisition processes – becauase we are far from finished building the Group.
Staffan Hanstorp, President and CEO
The information in this press release is such that Addnode Group AB (publ) must disclose in accordance with the Swedish Securities Market Act. The information was released on 26 October 2016, at 08:30 AM CET.
