Vitec Software Group AB Interim report January–March 2023

Summary of interim period, January–March 2023

  • Net sales SEK 613 million (447), an increase of 37%
  • Recurring revenues SEK 509 million (378), an increase of 35%
  • EBITA SEK 185 million (130), an increase of 42%
  • EBITA margin 30% (29)
  • Operating profit SEK 123 million (83), an increase of 47%
  • Operating margin 20% (19)
  • Earnings per share before dilution SEK 2.07 (1.76)
  • Cash flow from operating activities SEK 489 million (445)
  • Acquisition of Enova Holding B.V.

Vitec is financially strong with a stable and growing business

Continued strong growth is reported for the first quarter of the year as our total revenue increased by 37% to SEK 613 million compared with the same period last year. Our subscription-based recurring revenues grew organically by 12%, a slight increase even from the strong end of 2022. EBITA was SEK 185m, an increase of 42% and the margin was 30%, up from 29%. Despite higher interest rates and acquisition-related costs, our net profit increased by 25%.

Vitec is currently exposed to over 20 different verticals through our 37 business units. We have long-term relationships with our customers and by developing together with them we gain insight into their needs and market conditions. Although the start of the year was strong, we see that some of our business units are more affected than others by economic fluctuations and note some sluggishness in new sales, while others are performing very well. This is natural and we are historically used to this situation. Our business model, with a high proportion of recurring revenues and good risk diversification, gives us stability that is reinforced by the fact that our software is business-critical for our nearly 25,000 customers.

Something we have offered our customers for a long time and which we are seeing more and more of is transaction-based products as a complement to our standardized software. These provide added value to our customers and broaden our offer. Examples range from messaging services such as SMS, digital signatures, information services in the form of maps to commissions on payment services or other volume sold. Our latest acquisition, Dutch Enova, offers their energy management customers a virtual power plant based on the customers' flexible capacity to offer independent grid balancing services to the grid owner via daily auctions. These services generate added value for our customers when they are used and provide Vitec with revenues that are more transaction and volume-related in addition to our stable base of subscription revenues. We will therefore continue to disclose the proportion of our recurring revenues that are transaction-based.

Vitec is financially strong with a stable and growing business that focuses on delivering business-critical software. We are therefore well-positioned to continue on this path with a mix of organic and acquired profitable growth.

Olle Backman, CEO, Vitec Software Group