Vitec Software Group Interim report January–June 2023
SUMMARY OF INTERIM PERIOD, APRIL–JUNE 2023
• Net sales SEK 724 million (449), an increase of 61%
• Recurring revenues SEK 612 million (384), an increase of 59%
• EBITA SEK 226 million (120), an increase of 89%
• EBITA margin 31% (27)
• Operating profit SEK 164 million (74), an increase of 121%
• Operating margin 23% (17)
• Earnings per share before dilution SEK 2.59 (1.52)
• Cash flow from operating activities SEK 79 million (-43)
• Acquisition of DL Systems AB and Entry Event Sweden AB
SUMMARY OF INTERIM PERIOD, JANUARY–JUNE 2023
• Net sales SEK 1,336 million (895), an increase of 49%
• Recurring revenues SEK 1,121 million (763), an increase of 47%
• EBITA SEK 412 million (250), an increase of 65%
• EBITA margin 31% (28)
• Operating profit SEK 286 million (158), an increase of 81%
• Operating margin 21% (18)
• Earnings per share before dilution SEK 4.66 (3.28)
• Cash flow from operating activities SEK 569 million (402)
Vitec delivers a record quarter in terms of both volume and earnings
Vitec delivers a record quarter in terms of both volume and earnings. Total revenue increased by an impressive 61% to SEK 724 million compared with the same period last year. The corresponding figures for the first half of the year are 49% and SEK 1,336 million. Our subscription-based recurring revenues increased organically by 13%.
Growth can be attributed in part to some major acquisitions, but also to stable organic growth in volume and margins. We can now also see the effect of increased transaction-based revenue from our value added services, including from the acquisition of Enova. EBITA for the quarter totaled SEK 226 million, an increase of 89%, and the EBITA margin was 31%, up from 27%. Despite the negative impact of higher interest rates and increased tax costs, our net profit increased by 82%.
Cash flow for the year follows the expected pattern, as a large part of our subscription revenues are received in the first quarter, which contributes to our stable earnings and financial strength.
As usual, acquisitions for the period have been financed by a mix of internally generated cash flow, utilized credits and additional supplementary purchase considerations. We have made two bolt-on acquisitions that are good complement for us in the hospitality industry in Sweden, where we have become even stronger. Another exciting acquisition in the health sector was agreed in June and is awaiting regulatory approval for completion. In total, we have signed agreements for four acquisitions to date this year.
Our financial position is strong and we see good opportunities for further acquisitions, although competition remains fierce for the excellent vertical software companies that meet our acquisition criteria. These criteria, combined with a disciplined and sustainable approach to company valuations, comprise the strategy that has brought us to where we are today and will continue to serve us well in the future. The companies and employees that have joined our Group are developing well and each new addition brings knowledge and commitment that makes us a little better every day.
Our view of the world and our customers' behavior remains unchanged since the previous quarter's assessment: the picture is still mixed, with both strong development for some and a little slower in terms of new sales for others, but overall a stability in customer volume across all business units.
I would like to take this opportunity to thank our customers, employees and partners for a good first half of 2023 and wish you all a wonderful summer.
Olle Backman, CEO
Vitec Software Group