Vitec Software Group AB Year-end report January - December 2022

Summary of year-end report, January–December 2022

  • Net sales SEK 1,978 million (1,571), an increase of 26%
  • Recurring revenues SEK 1,631 million (1,324), an increase of 23% including 11% organically
  • EBITA SEK 582 million (440), an increase of 32%
  • EBITA margin 29% (28)
  • Operating profit SEK 356 million (283), an increase of 26%
  • Operating margin 18% (18)
  • Earnings per share before dilution SEK 6.92 (6.14)
  • Cash flow from operating activities SEK 563 million (488)
  • The Board of Directors proposes a dividend of SEK 2.28 per share (2.00)

Summary of interim period, October–December 2022

  • Net sales SEK 578 million (421), an increase of 37%
  • Recurring revenues SEK 451 million (350), an increase of 29% including 13% organically
  • EBITA SEK 171 million (113), an increase of 51%
  • EBITA margin 30% (27)
  • Operating profit SEK 106 million (70), an increase of 51%
  • Operating margin 18% (17)
  • Earnings per share before dilution SEK 1.87 (1.59)
  • Cash flow from operating activities SEK 74 million (58)
  • Acquisition of Oy Raisoft Ltd

Strong focus gives growth and increased margins

Vitec’s business concept is to contribute to the success of our customers by developing and providing standardized and niche business-critical software. Rarely has it been more relevant than in these times to maintain full focus on our mission and our core competencies. Focus is something that we at Vitec both appreciate and aim to achieve.

The year began with continued restrictions and spread of infection, Russia’s war against Ukraine and subsequent geopolitical tensions, the energy crisis, increased inflation and higher interest rates. The year 2022 will undeniably go down in history with gloomy headlines. Yet even under these circumstances, Vitec successfully delivered growth and increased margins – clearly an effect of its strong focus. Our business units are active in niche markets that are often critical for society and our software is critical for business. This makes us an important partner with considerable industry knowledge. Based on this knowledge and by applying a high degree of innovation, we have developed new products and increased functionality. It has strongly contributed to our growth and makes us even more relevant for the future.

During the year, we welcomed five new acquisitions and over 300 new employees. Through these acquisitions, we further expand our business into new verticals and geographies. This expansion equips us with new knowledge to solve the challenges of our customers in more industries, something we share internally. It also provides the Group with increased risk diversification, volume and brand awareness on the market.

Financially, the full year adds up to revenues of SEK 1,978 million, an increase of 26% with an EBITA margin of 29% compared with 28% the previous year. The year ended on a strong note as revenue for the fourth quarter jumped an impressive 37% year over year and the EBITA margin was 30%, compared with 27% the previous year. This growth and the strengthening of margins are the product of both strong organic growth of 11% and acquisitions of excellent vertical software companies. We have also responsibly balanced cost increases with price adjustments. The Group’s financial position is strong as a result of our internally generated cash flow and the share issue in November. This provides us with decisiveness to act under conditions that are conducive to further acquisitions. The Board of Directors is proposing an increased dividend for the twenty-first consecutive year, to SEK 2.28 per share.

We have intensified our efforts to clarify and highlight sustainability in our daily work over the course of the year. In response, the Board has adopted updated sustainability targets for the Group linked to our four focus areas.

I would like to take the opportunity to thank all employees who with deep knowledge and great commitment, continue to deliver long-term values.

In early January 2023 we received the sad news that Crister Stjernfelt, who served for many years as Board member and former Chairman of the Board, passed away, at the age of 79. Crister was an appreciated member of the Board of Directors and a friend. The Board of Directors and the management are grateful for his dedication and the time we spent together. Our thoughts are with Crister’s family.

Olle Backman, CEO, Vitec Software Group