SECOND QUARTER SIGNIFICANT BUSINESS EVENTS Sales icreased by 19.4% to MSEK 199.4 (MSEK 167.0) EBITDA icreased to MSEK 22.7 (MSEK 19.2) Profit before tax icreased by 22.6% to MSEK 20.6 (MSEK 16.8) Profit margi before tax icreased to 10.3% (10.1%) Profit for the period after tax icreased to MSEK 16.1 (MSEK 13.1) Profit for the period after tax per share, before ad after dilutio, icreased to SEK 0.31 (SEK 0.25) Cash flow from operatig activities amouted to MSEK 6.9 (MSEK 10.3) JANUARY-JUNE IN THE SECOND QUARTER Softroic acquired the software Charity ad customer agreemets from Bisode Sverige AB EARLIER IN THE YEAR Softroic siged a agreemet for the MRM membership system with Akademikerförbudet SSR, The Uio for Professioals Softroic was commissioed by the City of Stockholm as part of its Smart ad coected city strategy AFTER THE END OF THE PERIOD Softroic has siged a three-year agreemet with FASAB for the delivery of IT-related services Sales icreased by 18.0% to MSEK 386.7 (MSEK 327.8) EBITDA icreased to MSEK 42.8 (MSEK 33.6) Profit before tax icreased by 33.6% to MSEK 38.6 (MSEK 28.9) Profit margi before tax icreased to 10.0% (8.8%) Profit for the period after tax icreased to MSEK 30.1 (MSEK 22.6) Profit for the period after tax per share, before ad after dilutio, icreased to SEK 0.57 (SEK 0.43) Cash flow from operatig activities icreased to MSEK 37.4 (MSEK 27.2) Total liquidity amouted to MSEK 108 The equity/assets ratio amouted to 62% (66%) Softroic has siged a two-year framework agreemet with the Swedish Tax Agecy, which icludes IT ifrastructure INTERIM REPORT for the period 1 Jauary 30 Jue
Secod quarter Cotiued successes o a strog market The market Softroic s key operatios are cloud services, outsourcig ad other qualified assigmets with a loger time scale. The developmet ad sales of SaaS services for which Softroic has the software rights have itesified. The umber of iquiries ad deals of this kid is icreasig. There is reaso to believe that demad will remai high while there is demad for digitisatio i all areas of society. These assigmets have log sales cycles ad require extesive resources durig the procuremet process. Demad has reached a historic peak i Stockholm, Softroic s largest market, which has resulted i icreases i the hourly rates ad a icrease i busiess. The dowside is higher costs ad staff turover. But this situatio has resulted i higher profitability. The key is to adopt a leadig positio ad deliver complex assigmets that are extremely beeficial to the customer, which will the help to geerate ew busiess i the future. Softroic s solutios ca be foud everywhere i society ad are used by millios of users. Softroic has a solid foudatio of these assigmets that are stable i terms of profitability, as well as a very good fiacial positio. This meas that the compay has stayig power ad is able to act idepedetly regardless of the developmets o the market i the future. Growth ad profit developmet Oce agai it has bee a extremely good quarter for Softroic i terms of both results ad growth. Sales i the secod quarter icreased by 19.4% ad amouted to MSEK 199.4 (MSEK 167.0). All of this growth is orgaic. Sales per employee durig this quarter icreased, while the umber of employees icreased o average from 444 to 469. This is despite the fact that may of these ew employees had ot received the full paid hours from customers durig this quarter. Altogether this meat that profit before tax for the quarter icreased by 22.6% to MSEK 20.6 (MSEK 16.8), the profit margi icreased to 10.3% (10.1%) ad the EBITDA margi amouted to 11.4% (11.5%). Cash flow from operatig activities amouted to MSEK 6.9 (MSEK 10.3) i the secod quarter. Sales i the first six moths icreased by 18.0% to MSEK 386.7 (MSEK 327.8) Profit before tax for the first six moths amouted to MSEK 38.6 (MSEK 28.9). Cash flow from operatig activities icreased to MSEK 37.4 (MSEK 27.2) The profit margi for the six moths was 10.0% (8.8%). Coditios for the future Softroic has the clear goal of beig oe of the best listed IT cosultacy firms i terms of both growth ad profitability. The log-term goal is to achieve a 5-7% icrease i employees ad sales growth of a miimum of 10%, of which 2 at least half should be orgaic. Growth should always be profitable. Although Softroic is meetig its growth targets for sales, all of this growth has bee orgaic. The log-term target for the profit margi i the core busiess areas of outsourcig assigmets ad cloud services is higher tha 15%, while the target for the margi i other busiess, such as resources cosultacy sales ad re-sellig, is higher tha 5%. This meas that the target margi for the Group as a whole is higher tha 10% with today s mix of customers ad busiess. This target was achieved ot oly i, but also i the first six moths of, despite the sigificat growth. If the market remais good, it will cotiue to be possible to meet ad exceed this target. Softroic has a policy ot to make ay forecasts. Busiess evets i Softroic has acquired the software Charity ad customer agreemets from Bisode Sverige AB. Softroic has also siged a five-year reseller agreemet for Bisode Sverige s data services. The Uio for Professioals, Akademikerförbudet SSR, ad Softroic have siged a agreemet for the delivery of the MRM membership system. This agreemet relates to the itroductio project ad the ogoig delivery of MRM as a SaaS, sigificatly icreasig Softroic s commitmet to this customer over a period of may years. Softroic has bee asked to support the City of Stockholm i implemetig the Strategy for Stockholm as a smart ad coected city. This strategy states that a Smart City develops most effectively if the city collaborates o various techical platforms. Softroic s team will provide aalyses, evaluatios, procuremets, ad more importatly the itroductio of these techical platforms. After the ed of the period Sice the ed of the period, FASAB ad Softroic have siged a three-year agreemet for the delivery of IT-related services. This covers the followig services: techical operatio, applicatio maagemet, workplace service, Service Desk, IT security solutios ad related processes ad procedures with a estimated value of approximately MSEK 40-50. The Swedish Tax Agecy ad Softroic have siged a twoyear framework agreemet for the delivery of services for IT ifrastructure ad techology withi the followig assigmet areas: Aalysis ad ivestigatio, Team ad competece supply, Admiistratio ad developmet assigmets. The framework agreemet ca be exteded by up to two years by the Swedish Tax Agecy. These assigmets ca be carried out i various forms, for example, small assigmets, prelimiary studies, aalyses ad quality reviews, or as a major assigmet, coverig all or parts of the solutio. Liquidity The Group had MSEK 85 i cash ad cash equivalets as of 30 Jue. There was a divided of MSEK 39.5 i the secod quarter. The total liquidity comprisig cash ad cash equivalets, as well as grated but uutilised credit lies, amouted to MSEK 108.
Evets after the ed of the period There have bee o sigificat evets after the ed of the period. Risks ad ucertaities The risks ad ucertaities that the Paret Compay ad the Group may face are primarily related to chages i employee capacity utilisatio, average ivoicig, employee turover ad salary costs, which all have a decisive effect o profitability. Chages i these key parameters have bee commeted above uder the The market. Softroic Softroic is a IT ad maagemet compay whose busiess cocept is to offer solutios based o moder IT i order to create better busiess ad greater competitiveess for the compay s customers. By combiig experiece ad iovatio i cuttig-edge techology with competece i strategy ad orgaisatioal developmet, Softroic takes holistic resposibility from the eeds aalysis ad developmet of trasactio-itesive operatioal solutios to their implemetatio ad operatio. The compay was set up i 1984 ad curretly has approximately 460 employees at offices i Stockholm, Gotheburg, Malmö, Sudsvall ad Arjeplog. Softroic is listed o the NASDAQ Stockholm Small Cap. OTHER Reports Iterim Report (July-Sept), 25 October Auditors examiatio This report has ot bee examied by the auditors. Iformatio about the iterim report Aders Eriksso, Chief Executive Officer Email: aders.eriksso@softroic.se Tel. o.: +46 8 51 90 90 00 Softroic AB (publ), CIN 556249-0192 The Board of Directors ad Chief Executive Officer certify that this iterim report gives a true ad fair view of the developmet of the Group s operatios, fiacial positio ad results, ad describes the sigificat risks ad ucertaity factors facig the compay ad the compaies withi the Group. Petter Stillström, Chairma of the Board of Directors Aders Eriksso, Chief Executive Officer Stig Martí, Board member Susaa Marcus, Board member Aders Nilsso, Board member Cecilia Nilsso, Board member (employee represetative) Jeaa Rutherhill, Board member Tomas Högström, Board member (employee represetative) 3
SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME MSEK April-Jue April-Jue Ja-Jue Ja-Jue full year Reveue 199.4 167.0 386.7 327.8 657.0 Goods for resale ad other ivoiced expeses -62.7-46.1-118.6-93.1-188.4 Other exteral expeses -12.9-13.9-26.0-28.3-54.5 Persoel costs -101.1-87.8-199.3-172.8-338.6 Depreciatio, tagible assets -2.2-2.3-4.3-4.7-8.9 Operatig profit/loss 20.5 16.9 38.5 28.9 66.6 Net fiacial icome/expese Note 2 0.1-0.1 0.1 0.0 0.4 Profit/loss before tax 20.6 16.8 38.6 28.9 67.0 Tax -4.5-3.7-8.5-6.3-15.2 PROFIT/LOSS FOR THE PERIOD 16.1 13.1 30.1 22.6 51.8 Other comprehesive icome Ite ms that will b e re c las s ifie d to profit or los s Traslatio differeces 0.0 0.0 0.0 0.0 0.0 COMPREHENSIVE INCOME FOR THE PERIOD 16.1 13.1 30.1 22.6 51.8 Profit/loss for the period attributable to the Paret Compay sha 16.1 13.1 30.1 22.6 51.8 Comprehesive icome attributable to the Paret Compay share 16.1 13.1 30.1 22.6 51.8 Profit for the period per share, basic, SEK Note 1 0.31 0.25 0.57 0.43 0.98 Profit for the period per share, diluted, SEK Note 1 0.31 0.25 0.57 0.43 0.98 SUMMARY CONSOLIDATED BALANCE SHEET MSEK 6/30/ 6/30/ 12/31/ ASSETS Goodwill Note 4 109.3 109.3 109.3 Other itagible assets Note 4 4.9 7.5 5.4 Property, plat ad equipmet 9.7 11.5 11.3 Total fixed assets 123.9 128.3 126.0 Receivables, etc. 191.9 156.3 173.8 Cash ad cash equivalets 85.0 60.7 87.7 Total curret assets 276.9 217.0 261.5 TOTAL ASSETS 400.8 345.3 387.5 EQUITY AND LIABILITIES Equity 248.7 228.9 258.1 Deferred tax liabilities 1.8 2.0 1.9 Other provisios 1.6 0.7 - Curret liabilities, o-iterest-bearig 148.7 113.7 127.5 TOTAL EQUITY AND LIABILITIES 400.8 345.3 387.5 4
SUMMARY CONSOLIDATED EQUITY Total equity, MSEK Ja-Ju Ja-Ju full year Opeig balace 258.1 232.6 232.6 Comprehesive icome for the period 30.1 22.6 51.8 Divideds -39.5-26.3-26.3 Closig balace 248.7 228.9 258.1 All equity is attributable to the Paret Compay shareholders, as there are o o-cotrollig iterests. CONSOLIDATED CASH FLOW STATEMENT Summary, MSEK Note 3 April-Jue April-Jue Ja-Ju Ja-Ju full year Cash flow from operatig activities before chages i workig capital 17,0 13,4 30,5 26,2 67,0 Chages i workig capital -10,1-3,1 6,9 1,0-10,3 Cash flow from operatig activities 6,9 10,3 37,4 27,2 56,7 Cash flow from ivestig activities -0,4-0,3-0,6-2,5-5,0 Cash flow from fiacig activities -39,5-26,3-39,5-26,3-26,3 CASH FLOW FOR THE YEAR/PERIOD -33,0-16,3-2,7-1,6 25,4 Cash ad cash equivalets at the begiig of the year/period 118,0 77,0 87,7 62,3 62,3 Cash ad cash equivalets at the ed of the year/period 85,0 60,7 85,0 60,7 87,7 Cash flow from operatig activities per share, basic, SEK Note 1 0,13 0,20 0,71 0,52 1,08 Cash flow from operatig activities per share, after dilutio, SEK Note 1 0,13 0,20 0,71 0,52 1,08 ALTERNATIVE PERFORMANCE MEASURES GROUP, for defiitios, see Note 5 Profit April-Jue April-Jue Ja-Ju Ja-Ju full year Profit per share, basic/diluted, SEK Note 1 0.31 0.25 0.57 0.43 0.98 EBITDA, MSEK 22.7 19.2 42.8 33.6 75.5 EBITDA margi, % 11.4 11.5 11.1 10.3 11.5 Operatig margi, % 10.3 10.1 10.0 8.8 10.1 Profit margi, % 10.3 10.1 10.0 8.8 10.2 Profitability, equity, % 23.7 18.1 23.7 18.1 21.5 Sales April-Jue April-Jue Ja-Ju Ja-Ju full year Net sales, MSEK 199 167 387 328 657 Sales of cosultacy services, MSEK 153 134 298 261 519 Sales of goods, etc., MSEK 46 33 89 67 138 Sales per employee, TSEK* 425 376 839 748 1,490 Fiacial positio 6/30/ 6/30/ 12/31/ Equity, MSEK 249 229 258 Equity/assets ratio, % 62 66 67 Cash ad cash equivalets, MSEK 85 61 88 Uutilised credit lies, MSEK 23 23 23 5
ALTERNATIVE PERFORMANCE MEASURES GROUP, cot., for defiitios, see Note 5 Employees April-Jue April-Jue Ja-Ju Ja-Ju full year Average durig the period* 469 444 461 438 441 Number at the ed of the period* 460 441 460 441 445 Number of structural dismissals 0 1 1 4 6 *The umber of employees for i this report has bee adjusted from the oe that had previously bee reported. Developmet per quarter Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Net sales, MSEK 170.7 128.6 163.5 160.8 167.0 142.7 186.5 187.3 199.4 Profit/loss for the period before tax 14.3 9.0 14.9 12.1 16.8 14.3 23.8 18.0 20.6 Profit margi before tax, % 8.4 7.0 9.1 7.5 10.1 10.0 12.8 9.6 10.3 PARENT COMPANY S SUMMARY PROFIT AND LOSS ACCOUNT MSEK Ja-Jue Ja-Jue full year Reveue 387 323 664 Costs -348-292 -654 Operatig profit/loss 39 31 10 Net fiacial icome/expese 2 - - Appropriatios* - - 7 Profit/loss before tax 41 31 17 Tax -9-7 -16 NET PROFIT 32 24 1 *et Group cotributios paid/received PARENT COMPANY S SUMMARY BALANCE SHEET MSEK 6/30/ 6/30/ 12/31/ ASSETS Fixed assets 45 209 207 Curret assets 260 192 248 TOTAL ASSETS 305 401 455 EQUITY AND LIABILITIES Equity 138 167 145 Other provisios 2 1 - Curret liabilities, o-iterest-bearig 165 233 310 TOTAL EQUITY AND LIABILITIES 305 401 455 PARENT COMPANY S SUMMARY CASH FLOW STATEMENT MSEK Ja-Ju Ja-Ju full year Cash flow from operatig activities 38 19 57 Cash flow from ivestig activities -1-3 -5 Cash flow from fiacig activities -39-26 -26 CASH FLOW FOR THE YEAR/PERIOD -2-10 26 Cash ad cash equivalets at the begiig of the year/period 86 60 60 Cash ad cash equivalets at the ed of the year/period 84 50 86 6
NOTES Accoutig priciples ad supplemetary iformatio The iterim report has bee prepared i accordace with IAS 34, Iterim Fiacial Reportig, ad the Swedish Aual Accouts Act. Group operatios are wide-ragig ad are therefore reported as a segmet. The Group applies the same accoutig priciples ad uses the same bases for calculatio as i the Aual Report. The estimates follow the same priciples as i the Aual Accouts of. Comprehesive icome is reported as a exteded profit ad loss accout, icludig items previously recogised i equity. The Group s fiacial assets ad liabilities comprise accouts receivable, other curret receivables, prepaid expeses, accrued icome, cash ad cash equivalets, other provisios, accouts payable, other curret liabilities, accrued expeses ad deferred icome, with the carryig amouts the same as fair value. New ad ameded IFRS that have become applicable from are ot cosidered to have ay material effect o the fiacial statemets. IFRS 15, which came ito force from 1 Jauary, where reveue is recogised i a way that reflects the trasfer of good/services to customers ad where itegrated cotracts are recogised as separate obligatios, does ot have a material effect o the Group s fiacial statemets ad there are o trasitio problems. IFRS 16, which applies from 1 Jauary 2019, where assets ad liabilities for leases are recogised i the balace sheet, does ot affect the Group s fiacial statemets, except for reallocatio withi the fiacial statemets ad a higher balace sheet total, with differet performace measures as a result, for example, the solvecy measure. The trasitio method for IFRS 16 has bee decided, usig the forwardlookig method without ay historic recalculatios. IFRS 9 Fiacial istrumets, which came ito force o 1 Jauary, is ot cosidered to have a material effect o the fiacial statemets ad there are o trasitio problems. No trasactios with closely related parties took place durig the year that affected the compay s profit/loss ad fiacial positio. AB, Softroic Utvecklig AB, Yarrow Ivest AB ad Softroic Skaig AB merged to form Softroic AB. I the secod quarter the paret compay received divideds from several subsidiaries, with the participatios i these subsidiaries writte dow to the level of the subsidiaries equity. I this report there is oly a overview of the Paret Compay s profit ad loss statemet ad balace sheet, as the Group s sales ad balace sheet items are mostly i the Paret Compay. Note 1 Profit/loss per share The umber of shares before ad after dilutio whe calculatig earigs ad cash flow per share amouted to 52,632,803 shares. Note 2 Net fiacial icome/expese This item icludes iterest icome ad iterest expese. Note 3 Cash flow statemets Allocatio of ivestmets (MSEK) Ja-Jue Ja-Jue full year Net ivestmets i equipmet -0.2-2.5-4.4 Busiess combiatios -0.4 - -0.6 Total: -0.6-2.5-5.0 Note 4 Busiess combiatios A acquisitio took place of the assets ad liabilities of Bisode AB i the secod quarter of. Specificatio of busiess combiatios (M SEK) Ja-Jue Ja-Jue full year Total cost 2.0 - - Amouts paid i respect of previous acquisitio - - 0.6 Less upaid portio -1.6 - - Total cost paid 0.4 0.0 0.6 Acquired assets ad liabilities Other itagible assets 2 2.0 - - Amouts paid i respect of previous acquisitio - - 0.6 Less upaid portio -1.6 0.4 0.0 0.6 Total cash flow attributable to acquisitios 1-0.4 0.0-0.6 1 Cost paid less acquired cash ad cash equivalets. 2 Relates to the acquisitio of the assets ad liabilities of Bisode, with a remaiig purchase price of M SEK 1.6. I the first quarter, the wholly-owed subsidiaries, Cosultus Leadership Parter AB, Cosultus Maagemet Istitute AB, Cosultus Företagsutvecklig 7
Note 5 Alterative performace measures Softroic s fiacial statemets cotai alterative performace measures that supplemet the measures defied i applicable regulatios for fiacial reportig, such as icome, profit or loss, or earigs per share. Alterative performace measures are give, as they provide more idepth iformatio tha the measures defied i the regulatios. The alterative performace measures are disclosed below because they are used by maagemet to evaluate the fiacial performace ad are thereby believed to give aalysts ad other stakeholders valuable iformatio i order to evaluate Softroic s fiacial positio ad results. I the sectio below, we have defied how the alterative performace measures are calculated by Softroic. Defiitios of performace measures may deviate from the defiitios give by other compaies, eve though the measures have the same ames. The alterative performace measures origiate from the cosolidated accouts ad are ot measures of our fiacial results or liquidity i accordace with IFRS, which is why they should ot be cosidered to be alteratives to et profit, operatig profit or other key measures i accordace with IFRS, or as a alterative to cash flow as a measure of our liquidity. Key figures Defiitio/explaatio of iformatio value ad purpose Calculatio Ja-Ju Provides a more uaced ad i-depth uderstadig of profit Profit developmet Operatig margi, % Operatig profit/icome (38,5/386,7)*100=10,0 Profit margi, % Profit before tax/icome (38,6/386,7)*100=10,0 EBITDA margi, % Operatig profit before depreciatio ad amortisatio/icome (42,8/386,7)*100=11,1 Profitability, equity, % Profit for the 12-moth period/average equity over 5 quarters (59223/(1248130/5))*100=23,7 EBITDA, MSEK Operatig profit before depreciatio ad amortisatio 38,5+4,3=42,8 Sales Provides a more i-depth isight ito the distributio of sales Sales of cosultacy services, MSEK Icome for cosultats, icludig agreemet icome 298 Sales of goods, etc., MSEK Icome for hardware, liceces ad ivoices to third parties 89 Sales per employee, TSEK Icome/umber of employees o average (386,7/461)*1 000=839 Fiacial positio Provides a good overview of total liquidity ad solvecy Equity/assets ratio, % Total equity/total equity ad liabilities 248,7/400,8*100=62 Uutilised credit lies, MSEK Available but uutilised overdraft facilities 23 Total liquidity, MSEK Cash ad cash equivalets plus uutilised credit lies 85+23=108 Employees Provides a summary of chages i staff Average durig the period Number of employees o average 461 Number at the ed of the period Number of employees 460 Number of structural dismissals durig the period Number of structural dismissals 1 The iformatio i this iterim report is the iformatio that Softroic AB (publ) must publish i accordace with Regulatio (EU) No 596/2014 of the Europea Parliamet ad of the Coucil o market abuse (MAR). This iformatio was submitted for publicatio, through the agecy of Softroic AB, o 15 August at 08.00 (CET). This report ad additioal iformatio about Softroic AB are available at www.softroic.se. Switchboard: +46(0)8-51 90 90 00 Fax: +46(0)8-51 90 91 00 Email: ifo@softroic.se Headquarters: Softroic AB (publ) Hammarby Kaj 10A SE-120 32 STOCKHOLM, Swede. CID 556249-0192 STOCKHOLM GOTHENBURG MALMÖ SUNDSVALL ARJEPLOG WWW.SOFTRONIC.SE