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Vitec Software Group AB (publ)
Vitec Software Group
Vertical Market Software
Lars Stenlund, VD
Vitec Software Group AB (publ)
Vitec Short Facts
VITEC SHORT FACTS
Software company with industry-specific solutions
Founded in 1985 by Lars Stenlund and Olov Sandberg
Annual Turnover of SEK 316 million in 2010
Operating Profit of SEK 20 million in 2010
Number of employees approx. 300, with 90% in Sweden
Active in five customer areas/(Vertical Markets)
Seven offices in Sweden, one in Oslo and one in the U.S.
Listed on NASDAQ OMX, Stockholm (Small Cap)
Aprox.1 500 shareholders
Vitec Software Group AB (publ)
Offering
Unique Offering
We focus on industry-specific business systems that are more
cost effective than general solutions.
Software
Specialist Services
Contracts for support and maintenance
Mission
With value-creating software and services we offer customers
viable, modern business support.
Vitec Software Group AB (publ)
Business Strategy
The competition
Small competitors with limited
resources to grow, sometimes without
"professional" management.
High entry barriers
Mission critical systems with high exchange cost and long lead times in
developing.
Subcontractors
Low dependence on third party vendors, self-development
predominate.
Customers
Markets with one hundred to several
thousand customers. Not billion markets.
Customers option
Limited and less cost-effective solutions from
generalists and consultants.
Vertical Market Software
Vitec Software Group AB (publ)
Growth Strategy
2 - Refine
Create operational improvements and establish strategic
direction.
Increase Cash Flows.
2 - Refine
Create operational improvements and establish strategic
direction.
Increase Cash Flows.
3 - Grow
Implement additional acquisitions and organic growth.
3 - Grow
Implement additional acquisitions and organic growth.
1 - Acquire
Identify and select vertical market
acquisition candidates and negotiate and
acquire.
1 - Acquire
Identify and select vertical market
acquisition candidates and negotiate and
acquire. Capital
Vitec Software Group AB (publ)
A selection of our customers
Vitec Software Group AB (publ)
Selection of customers – Property managers Selection of customers – Property managers
Vitec Software Group AB (publ)
Business Area Fastighet Business Area Fastighet
Rental
coupon
Tenant pages
Apartment rentals
Vitec Software Group AB (publ)
Selection of customers - Mäklare Selection of customers - Mäklare
Vitec Software Group AB (publ)
Business Area Mäklare Business Area Mäklare
Data for www.hemnet.se
Purchase Agreement
Appl. on the brokers website
Vitec Software Group AB (publ)
Selection of customers - Energi Selection of customers - Energi
Vitec Software Group AB (publ)
Business Area Energi Business Area Energi
Power load forecasts
Network calculations of electricity load
Windpower forecasts
District heat pipe flow
Vitec Software Group AB (publ)
Selection of customers – Finans och Försäkring Selection of customers – Finans och Försäkring
Vitec Software Group AB (publ)
Business Area Finans och Försäkring
Mortgage calculations
Pension Calculations
Vitec Software Group AB (publ)
Selection of customers - Media Selection of customers - Media
Vitec Software Group AB (publ)
Business Area Media Business Area Media
SMP – Social Media Platform
Vitec Software Group AB (publ)
1985 Vitec is formed
1998 Listing on Aktietorget
1998–2002 Acquisition of
companies offering software for real
estate management
2002 – Year of IT-crash. Vitec gives
dividend for first time (0.25 kr)
2003 – Strategies for growth and
acquisitions are formulated
Vitec completed 10 company
acquisitions and nine acquisitions of
product rights or assets.
2010 - Turnover is SEK 316 million
(Dividends of SEK 1.25)
2011 - First acquisition outside of
Sweden
0
50
100
150
200
250
300
350
Turnover (million SEK)
History of successful growth
Milestones
Vitec Software Group AB (publ)
Strong Earnings Growth
0
5
10
15
20
25
2003 2004 2005 2006 2007 2008 2009 2010
22,4 %/year
Profit before tax (million SEK)
Vitec Software Group AB (publ)
Revenue Growth
0
50
100
150
200
250
300
350
2003 2004 2005 2006 2007 2008 2009 2010
Capitex
3L System
Mäklarsystem
Media
Energi
Fastighet
25%/år
Growth is driven both organically and through acquisition of new business areas
( m
illio
n S
EK
)
Vitec Software Group AB (publ)
Growth while maintaining profitability
0%
5%
10%
15%
20%
25%
30%
2002 2003 2004 2005 2006 2007 2008 2009 2010
Return on capital employed Return on equity
Vitec Software Group AB (publ)
Locations and Employees
Year Location No. Of employees
1985 Umeå 31
1998 Stockholm 68
2000 Malmö 6
2001 Göteborg 53
2003 Västerås 12
2005 Linköping 45
2009 Dayton Ohio, USA 20
2009 Östersund 7
2010 Kalmar 70
2011 Oslo 14
~ 320
Vitec Software Group AB (publ)
Interim Report January - September 2011
EARNINGS PER SHARE UP 123 %
NET SALES 265,7 Mkr (214,2)
OPERATING PROFIT 30,2 Mkr (11,6)
OPERATING MARGIN 12 % (6)
EARNINGS PER SHARE 5,11 kr (2,29)
CASH FLOW 42,7 Mkr (36,1)
LISTING ON NASDAQ OMX STOCKHOLM
ACQUSITION OF IT MAKERIET A/S IN NORWAY
Key events in the third quarter 2011
• Vitec subsidiary 3L System AB (publ) signs a contract worth 2.3 million USD
Significant events after the period
• Vitec call an extraordinary general meeting on 11 November concerning proposals for convertibles to
employees of the Vitec Group.
Vitec Software Group AB (publ)
Turnover and repetitive portion per quarter
0,0
20,0
40,0
60,0
80,0
100,0
120,0
Q3-08 Q3-09 Q3-10 Q3-110,0
20,0
40,0
60,0
80,0
100,0
120,0
Turnover Repetitive portion
Turn
ove
r (m
illio
n S
EK)
Re
pet
itiv
e p
ort
ion
(%
)
Vitec Software Group AB (publ)
Revenue and operating margin by quarter
-5
0
5
10
15
20
25
30
Q3-08 Q3-09 Q3-10 Q3-11
-20
0
20
40
60
80
100
120
Op
eta
tin
g m
argi
n (
%)
Turn
ove
r (m
illio
n S
EK)
Turnover (million SEK) Operating margin %
Vitec Software Group AB (publ)
Income Statement January – September 2011
Income Statement
Jan-Sept 2011
Jan-Sept 2010
OPERATING REVENUE
License revenues 17 670 15 304
Recurring revenues 157 120 127 270
Service revenues 82 581 63 872
Other income 8 350 7 704
NET TURNOVER 265 720 214 150
Other operating income 1 152 2 399
Depreciation -17 001 -12 585
Work performed for own account 9 909 8 166
Other costs -227 570 -199 063
OPERATING EXPENSES -234 662 -203 482
OPERATING PROFIT 32 210 13 067
Financial items -2 030 -1 426
INCOME AFTER FINANCIAL ITEMS 30 180 11 641
Tax -6 788 -3 269
NET INCOME 23 392 8 372
Attributable to the shareholders of Vitec 21 930 8 942
EARNINGS PER SHARE (SEK/share) 5,11 2,29
Recurring
Service
Licence
Other
0
1
2
3
4
2004 2005 2006 2007 2008 2009 2010
Earnings per share (SEK)
Vitec Software Group AB (publ)
Balance September 30, 2011
Balance 2011-09-30 2010-09-30
FIXED ASSETS
Goodwill 101 411 89 490
Capitalised development expenditure 25 712 20 557
Product rights 71 147 70 042
Equipment and furniture 13 095 7 148
Other non-current receivables 2 105 1 714
CURRENT ASSETS
Inventories 68 87
Current assets 64 814 72 869
Cash 35 288 38 737
TOTAL ASSETS 313 640 300 644
EQUITY 112 587 86 287
MINORITY INTEREST 21 124 18 710
NON-CURRENT LIABILITIES AND PROVISIONS 66 432 81 015
CURRENT LIABILITIES 113 497 114 632
TOTAL EQUITY AND LIABILITIES 313 640 300 644
0
5
10
15
20
25
2004 2005 2006 2007 2008 2009 2010
Owners equity per share (SEK)
Vitec Software Group AB (publ)
Cash flow January – September 2011
Cash flow Jan-Sep 2011 Jan-Sep 2010
OPENING EQUITY
Operating profit 32 210 13 067
Adjustments for items not included in cash flow 17 001 12 585
Interests and taxes -11 938 -11 507
CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGE IN WORKING CAPITAL
37 273
14 145
Change in working capital 5 437 21 924
CASH FLOW FROM OPERATING ACTIVITIES 42 710 36 069
Cash flow from investing activities -25 765 -52 933
Cash flow from financing activities -13 777 29 112
CASHFLOW 11 704 29 349
Cash and cash equivalents at beginning of period 32 120 26 551
CASH INCLUDING SHORT-TERM INVESTMENTS AT END OF PERIOD*
35 288
38 739
• Available cash and cash equivalents at end of period includes SEK 12.6 million in 3L System AB
0
1
2
3
4
5
6
7
8
2004 2005 2006 2007 2008 2009 2010
Cash earnings per share (SEK/share)
Vitec Software Group AB (publ)
Segment reporting January-Sept. 2011
Business area Net turnover (million SEK) Operating profit (million SEK)
2011 July-Sept
2010 July-Sept
2011 Jan-Sept
2010 Jan-Sept
2011 July-Sept
2010 July-Sept
2011 Jan-Sept
2010 Jan-Sept
AO Mäklare 36 095 13 824 102 042 40 947 10 864 3 459 23 460 7 268
AO Fastighet 15 570 15118 51 555 50 178 2 284 1 682 7 937 6 338
AO Energi 3 893 3 809 13 823 12 727 870 1 029 3 666 3 062
AO Media 3 695 4 224 13 202 14 191 -813 -763 -1 540 -1 822
AO Capitex 3 498 20 219 14 499 20 219 463 2 489 2 853 2 489
AO 3L System 20 479 19 518 70 596 75 888 664 -9 725 2 089 -2 673
Common - - - - -2 430 554 -6 255 -1 595
Vitec Group 83 230 76 712 265 720 214 150 11 902 -1 275 32 210 13 067
AO Mäklare 73 %
AO Fastighet 25 %
AO Energi 11 %
AO Media 0 %
AO Capitex 9 %
3L System AB 6 %
AO Mäklare 38 %
AO Fastighet 19 %
AO Energi 5 %
AO Media 5 %
AO Capitex 5 %
3L System AB 27 %
Revenue shares business areas January - September 2011 Performance parts business areas January - September 2011
Vitec Software Group AB (publ)
Board Board
Nils-Eric Öquist Chairman
Carl-Erik Nyquist
Crister Stjernfelt
Kaj Sandart
Olov Sandberg
Jan Friedman
Birgitta Johansson-
Hedberg
Vitec Software Group AB (publ)
Largest shareholders
No. of Shares* No. of A-shares
No. of B-shares
Capital %
Votes
%
Lars Stenlund 364 000 73 743 10,3 32,4
Olov Sandberg 364 000 38 771 9,5 32,1
Jerker Vallbo 72 000 31 750 2,3 6,5
LF Småbolagsfond 311 132 7,1 2,7
Thomas Eklund 231 763 5,6 2,1
Nils-Eric Öquist 211 450 5,1 1,9
Kristofer Stenum 135 317 3,1 1,2
Rambas AB 133 700 3,1 1,2
Avanza Pension (FRV) 132 770 3,0 1,2
Niklas Stenum 117 146 2,7 1,1
Nordnet Pensions (FRV) 46 382 1,1 0,4
Alfred Berg Småbolag 24 775 0,5 0,2
Other shareholders 2 067 832 48,8 18,1
TOTAL 800 000 3 451 450 100% 100%
* The number of holdings as at 2011-08-01
Vitec Software Group AB (publ)
Value creation for shareholders
Vitec Software Group AB (publ)
Business Goals
Growth targets
Continued growth of 25 % on average, of which 5 -10 % organic.
Financial targets
Profit margin 15 %.
Dividend targets
1/3 of the profit will be distributed to shareholders.
Vitec Software Group AB (publ)
Strategy for continued growth
Strategy
● Organic and acquisition-driven growth
● Vertical Market Orientation
- Defined market with potential
- Possible to achieve dominance
● Business models with repeatable revenue
Acqusition targets
● Target companies with turnover SEK 10 – 100 million
- Vertical Market Software Companies
- New nisch/market alt. completion
- Earnings per share critical factor
- Prize about 5-7 times annual profit depending on equity
Next: Nytt tillväxtmål – fortsatt expansion…
Vitec Software Group AB (publ)
Vitec Software Group
www.vitec.se
Vertical Market Software
Lars Stenlund, VD