Viking Assistance Group AS. Quarterly Report 3Q17 July September 2017

Transcription

1 Viking Assistance Group AS Quarterly Report 3Q17 July September 2017

2 THIRD QUARTER 2017 SUMMARY Group revenues of MNOK 179,0 Group EBITDA of MNOK 12,6 Solid assistance margins during the quarter Higher costs and losses due to restructuring project in Sweden Successful start of in-house call center operations in Spain Amounts in NOK 000 Jul Sep Jul - Sep Group revenue 179,0 176,9 COGS 118,7 115,6 Gross margin 33,7 % 34,7 % EBITDA * 12,6 20,1 Total Assets * Viking defines EBITDA as operating profit after adjustment of operating expenses for depreciation, amortization and impairment losses, foreign exchange differences recognized in income pertaining to revaluation of items in the balance sheet and non-recurring items. Operational comments Highlights from the quarter includes robust group revenues with higher project related costs. Group revenues of MNOK 179,0 for the quarter are in line with same period last year of MNOK 176,9. Assistance volume has been characterized by normal activity levels during the quarter in all geographic areas. Number of assistances for the quarter was 5 percent higher than same period last year with no significant new clients adding volume. Organic growth in Sweden and Denmark driving the increased volume, while Norway near same level as 3Q16. The group average assistance gross margin for the third quarter is in line with 3Q16. Gross margins in Sweden affected negatively by the ongoing restructuring process, while gross margins in Norway and Denmark are both approximately 8 percent higher than 3Q16. EBITDA margins for the group are affected by the reorganization of the call center and higher other operating costs during the period. The Viking call center in Spain was informally opened and operational as of 1 July. Currently Viking has 64 operating agents in place answering calls from Norway and Sweden. The call center operations during the quarter have improved steadily from previous operator and performance is now at satisfactory levels. During the third quarter, Viking entered into a joint venture with Assistansbolaget AB. The ambition is to establish a strong platform from where to build a substantial subscription base in Norway, thus competing directly in the Norwegian retail market. The retail subscription product will be marketed as Viking Assistance in Norway and the first campaign of DMs was distributed ultimo October. 2 (7)

3 Assistance volume in Sweden is up by 25 percent compared to same period last year. The growth is related to new clients, growth from existing partners and increased brand awareness in the Swedish direct market. Higher project- and assistance costs in Sweden are affecting the margins and the 3Q17 result. However, we expect performance to improve in line with increasing quality from call center and cost control activities in Spain, and as the accounting for the Swedish entities is fully reorganized. Organizational changes during the quarter includes the appointment of a chief commercial officer with experience from the Nordic car manufacturer market and the internal recruitment of a new operations manager. Significant events during the period Positive development in the Danish operations with increased profitability and high tender activity. Commencement of call center operations in wholly owned subsidiary in Spain with 65 Swedish and Norwegian speaking full- and part-time staff employed. Invoicing partner Lindorff now implemented in all entities, including 100 percent of external invoicing from wholly owned stations in Oslo, Stockholm and Copenhagen. Hire of new chief commercial officer and appointment of new chief operating officer. Viking branded towing trucks operational in Helsinki, Finland during the quarter. Viking in contention in several ongoing material tenders at end of quarter. Significant events after the end of the period On 6 November, the wholly owned Stockholm station was completely damaged after a fire originating in the next door premises. The damages are covered by insurance and there were no human injuries. Only non-critical vehicles were damaged and operations have been re-established in our head office in Stockholm. We have received notification of substantial volume increase during 2018 from existing clients in Sweden. Introduction of Viking Assistance AS as subscription based coverage product introduced in the Norwegian retail market. Personnel and organization At the end of the period, the number of employees amounted to 276. Including external resources, such as dedicated people with contract suppliers and subcontractors, the Group employed ~290 people. Investments The Group s acquisition of intangible assets during the second quarter amounted to MNOK 1.2. Investments in tangible assets during the quarter amounted to MNOK 6,2. The investments are mainly related to development of the ERP system VIS and net investments in rescue vehicles in subsidiaries. Net financial investments for the third quarter amounted to MNOK 6,2 (5,3) and MNOK 10,6 YTD (13,2). 3 (7)

4 EBITDA Non-recurring and other non-operational items identified during the third quarter amounted to MNOK 4,4. Non-recurring items are mainly related to extraordinary costs related to the insourcing and establishment of Viking call center in Spain, establishing and branding of vehicles in Viking Finland and restructuring in the Swedish operations. Risks and factors of uncertainty Viking Assistance Group s operations are exposed to certain risks that could have a varying impact on earnings or its financial position. These can be divided into industry, operational and financial risks; including regulatory and competitive risks. A material part of the Group s revenues and profits is derived from operations outside Norway. Currency fluctuations may influence the reported figures in Norwegian Kroner to an increasing extent. Please refer to the annual report of 2016 for a more detailed description of the risks identified. Related party transactions There were no related party transactions of material effect during the relevant period. Legal disclaimer Certain statements in this report are forward-looking and the actual outcomes may be materially different. In addition to the factors discussed, other factors could have an impact on actual outcomes. Such factors include developments for customers, competitors, the impact of economic and market conditions, national and international legislation and regulations, fiscal regulations, fluctuations in exchange rates and interest rates and political risks. 29 November 2017 The Board of Directors of Viking Assistance Group AS 4 (7)

5 CONDENSED FINANCIAL REPORTS CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONDENSED) Amounts in mnok Q YEAR TO DATE Sales 179,0 176,9 554,0 552,7 COGS 118,7 115,6 359,2 352,4 Gross profit 60,3 61,2 194,8 200,3 Gross margin (%) 33,7 % 34,6 % 35,2 % 36,2 % Other group costs and ov erheads * 47,7 41,1 136,8 131,7 EBITDA 12,6 20,1 57,9 68,6 EBITDA - margin (%) 7,1 % 11,4 % 10,5 % 12,4 % Depreciation 3,6 5,0 10,3 15,9 EBITA 9,0 15,1 47,6 52,7 EBITA - margin (%) 5,0 % 8,5 % 8,6 % 9,5 % Amortization 12,5 12,5 37,4 37,4 EBIT -3,4 2,6 10,2 15,3 Interest expenses / (income) 13,6 21,2 63,3 58,6 Tax -2,1-2,2-7,9-4,4 Net income before dividend -15,0-16,4-45,2-38,9 Non recurring items * 4,4 0,7 9,3 5,6 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONDENSED) Amounts in mnok END OF END OF END OF SEPTEM BER 2017 SEPTEM BER 2016 DECEM BER 2016 Tangible fixed assets Financial fixed assets Intangible fixed assets Total fixed assets Stock/WIP (Inv entory) Trade debtors (Accounts receiv ables) Other current assets Total current assets (excl cash) Cash Total assets Trade creditors (Accounts payables) Other creditors Other current liabilities Total current liabilities Deferred taxes Long term borrowings other Financial lease (FL) Borrowings Total equity and liabilities (7)

6 CONSOLIDATED STATEMENTS OF CASH FLOWS (CONDENSED) Amounts in mnok Q YEAR TO DATE EBITDA recurring 12,6 20,1 57,9 68,6 One off's -4,4-0,7-9,3-5,6 EBITDA actual 8,2 19,4 48,7 63,0 Changes working capital 3,2-20,2-42,7-31,0 Tax 0,0 0,0 0,0 0,0 Operational cashflow 11,4-0,7 6,0 32,0 CAPEX -7,4-5,3-10,6-13,2 Interest -10,6-6,1-22,1-20,0 Acquisition/Inv estments* -0,1 0,0-0,4-0,5 CF before debt changes -6,7-12,1-27,1-1,6 Debt changes 10,2-19,2 12,4-25,8 CF after debt changes 3,5-31,3-14,7-27,4 CONSOLIDATED KEY RATIOS Amounts in NOK 000 Jul Sep Jul - Sep Group revenue 179,0 176,9 COGS 118,7 115,6 Gross margin 33,7 % 34,7 % EBITDA * 12,6 20,1 Total Assets * Viking defines EBITDA as operating profit after adjustment of operating expenses for depreciation, amortization and impairment losses, foreign exchange differences recognized in income pertaining to revaluation of items in the balance sheet and non-recurring items. NOTES TO THE FINANCIAL REPORTS The consolidated financial statements of Viking Assistance Group AS comprise of the company and its subsidiaries, collectively referred to as the Group. The Group operates within markets that involve certain operational risk factors. The Group is further exposed to risk that arise from its use of financial instruments. The various companies within the Group are systematically working to mitigate and manage risk on all levels. Basis of preparation This interim report has been prepared in accordance with GAAP. The accounting principles are the same as those applied in the latest annual report unless otherwise stated below. The report has not been subject to review by the auditors of Viking Assistance Group AS. 6 (7)

7 New and changed accounting standards in 2017 None of the standards and statements that have been published by the IASB and are effective for annual periods beginning on or after 1 January, 2017, have had any material impact on the financial statements of the Group. Segment information by geographical area Amounts in mnok Q YEAR TO DATE Sales 179,0 176,9 554,0 552,7 Norway 117,5 115,2 358,6 373,1 Sweden 36,8 36,5 113,5 97,5 Denmark 24,8 25,2 81,9 82,1 EBITDA 12,6 20,1 57,9 68,6 Norway 14,2 21,1 59,5 71,7 Sweden -1,5-0,6-2,9-1,8 Denmark -0,1-0,4 1,3-1,3 Alternative Performance Measures EBITDA EBITDA is a financial parameter that Viking Assistance Group AS considers to be relevant to an investor who wants to understand the generation of earnings before investment in fixed assets. VIKING defines EBITDA as operating profit after adjustment of expenses for depreciation, amortization and impairment losses, foreign exchange differences recognized in income pertaining to revaluation of items in the balance sheet and non-recurring items. Any effects from business combinations are not included. CONTACT DETAILS Address: Viking Assistance Group AS Fornebuveien LYSAKER Norway post@vikingredning.no Web: All financial information is posted on immediately after publication. 7 (7)