SALES GROWTH AND INCREASED OPERATING MARGIN

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1 SALES GROWTH AND INCREASED OPERATING MARGIN SUMMARY FOR JANUARY-SEPTEMBER 2015 Net sales SEK 448,3 M (350,4) Profit before tax SEK 67,8 M (42,4) Operating margin 16 % (13) Earnings per share before dilution SEK 9,02 (5,47) Cash flow from operations SEK 106,4 M (91,1) SUMMARY FOR JULY-SEPTEMBER 2015 Net sales SEK 152,2 M (132,8) Profit before tax SEK 24,0 M (18,1) Operating margin 17 % (15) Earnings per share before dilution SEK 3,25 (2,02) Cash flow from operations SEK 7,0 M (0,6) Acquisition of Datamann A/S and Infoeasy AS CEO S COMMENTS The quarter got off to a quick start, with two acquisitions in two days. The two acquired companies Datamann in Denmark and Infoeasy in Norway both deliver software to the automotive industry. Together with Autodata in Norway, these now form Business Area Auto, which will have annual sales of approximately SEK 100 million. At the same time as Business Area Auto is being strengthened, this also entails improved spreading of risks within the group. Four of seven business areas presently have sales of over SEK 100 million and no business area constitutes more than 30 percent of the group. Vitec's financial position and preparedness for future acquisitions are good. The credit facility of SEK 250 million arranged on June 30, along with the group's earning capabilities, provides the financial conditions. We intend to continue growing through acquisitions, and with a Nordic focus we are monitoring a list of prospects of about 100 attractive, vertical software companies, with combined sales in excess of SEK 4 billion. We thus see good conditions for continued acquisitions. Following our applied business model, with strivings for a high portion of recurring revenue, continues to produce results. Recurring revenue accounted for 81% (78% last year) of the quarter's total revenue, and for the year's first three quarters, the corresponding figure was 79% (75%). The high portion of recurring revenue gives us the capability to take a long-term and consistent approach, at the same time as it provides excellent conditions for absorbing temporary downturns within individual business areas. With a clear shift from traditional licensing to a subscription model (SaaS), the portion of recurring revenue and the operating margin increase simultaneously. Together with our employees' tremendous capacity for renewal and integrating acquisitions, this provides good conditions for long-term development of our entire organization. With frequent acquisitions of well-established companies and a growing portion of recurring revenue, Vitec will continue along the established path, operating in several independent and specialized niche markets to achieve sustainable and profitable growth. Lars Stenlund, CEO

2 January - September 2015 The group s focus on increasing repetitive revenue streams and efficiency continues to produce positive effects. The period has been strong and brought improvements to nearly all of our operations. Two new units have been added to Business Area Auto during the period, which has further increased both sales and repetitive revenue streams, and strengthened our product portfolio. Business Area Estate Agent Our Swedish organization held its annual user meetings, which for the first time, were overbooked. We set a new record by a wide margin in total participants. During the period, the real estate firm of Erik Olsson Fastighetsförmedling deployed our new web-based system Express. In making full use of our cloud service, the firm has become 100 percent mobile, giving estate agents both considerable flexibility and increased efficiency. Our Norwegian organization launched a new integration engine, Vitec Hub, which makes it easier for external solutions to integrate with our systems. We also co-located one of our units to downtown Oslo. Business Area Real Estate Real Estate continues the strong trend with constant improvements both to sales volumes and profits. The order volume is strong and we are continuing to win market shares. During the period, the business area's largest-ever implementation project was completed according to plan for our customer Förvaltaren in Sundbyberg. Just as for Estate Agent in Sweden, Real Estate set a new participant record for its user meeting, which was recently held in Solna. Business Area Media A new version of the Balans business system was launched during the period. We have seen continued high demand for our services among the business area's larger customers. Business Area Energy Energy reported increases both in profits and sales during the period. The business area continues to place major emphasis on cultivating the European market, primarily when it comes to wind and energy prognoses. Business Area Health Health provides a complete, web-based, medical records system for the Finnish market. During the period, a specification project was begun for a new larger customer. The previous product unit Koupio has moved to Tammerfors and operations have thus become better coordinated at a single geographical location. Business Area Auto Business Area Auto strongly increased sales during the period. This was because of a new company in Norway that provides repair shop systems and a new company in Denmark with software for car dealerships and repair shops. Our previous organization in Norway released a new software version for the Norwegian car inspection market. Business Area Finance and Insurance Finance and Insurance in Denmark has launched the latest version of our portfolio management system. The new version entails a technology upgrade that gives our customers a modern and efficient solution. Roll-out of the new version means that we can now shift our focus and cultivate the market with full force. The Swedish organization has signed a new customer agreement for our solution for capital gains. VITEC INTERIM REPORT JANUARY-SEPTEMBER

3 FINANCIAL INFORMATION Sales and results July-September 2015 Revenues Net sales for the period amounted to SEK 152,2 million (132,8), which represents an increase of 15 %. License revenue increased 14 % from the previous year and amounted to SEK 4,8 million (4,2). Recurring revenue for the period increased by 18 % from the previous year and amounted to SEK 123,4 million (104,2), corresponding to 81 % (78) of net sales. Service revenues increased by 2 % from the previous year and amounted to SEK 22,1 M (21,6). Fox Publish AS and ADservice Scandinavia AB were consolidated from March 2 and contributed during the period with net sales of SEK 4,6 million. Datamann A/S was consolidated from July 1 and contributed with net sales of SEK 9,9 million. Infoeasy AS was consolidated from July 2 and contributed with net sales of SEK 5,1 million. Results Operating profit amounted to SEK 25,6 million (19,4) with an operating margin of 17 % (15). Profit after tax amounted to SEK 19,1 million (11,7). Earnings per share before dilution were SEK 3,25 (2,02). January-September 2015 Revenues Net sales for the period amounted to SEK 448,3 million (350,4), which represents an increase of 28 %. License revenue declined 10 % from the previous year and amounted to SEK 15,2 million (16,8). Recurring revenue for the period increased by 35 % from the previous year and amounted to SEK 355,2 million (263,6), corresponding to 79 % (75) of net sales. Service revenues increased by 13 % from the previous year and amounted to SEK 73,8 M (65,4). Fox Publish AS and ADservice Scandinavia AB were consolidated from March 2 and contributed during the period with net sales of SEK 15,5 million. Datamann A/S was consolidated from July 1 and contributed with net sales of SEK 9,9 million. Infoeasy AS was consolidated from July 2 and contributed with net sales of SEK 5,1 million. Results Operating profit amounted to SEK 72,2 million (45,3) with an operating margin of 16 % (13). Profit after tax amounted to SEK 53,0 million (30,2). Earnings per share before dilution were SEK 9,02 (5,47). Liquidity and financial status The Group's cash and cash equivalents, including short-term investments, at end of period amounted to SEK 55,4 million (51,9). In addition to these cash and cash equivalents, was a bank overdraft facility of SEK 20 million, and SEK 195,2 million of a credit facility of SEK 250 million. Cash flow from operating activities was SEK 106,4 million (91,1). Investments totaled SEK 48,5 million in intangible assets including capitalized work and SEK 8,2 million in tangible assets. Through the acquisitions of Fox Publish AS, ADservice Scandinavia AB, Datamann A/S and Infoeasy AS SEK 100,1 million was invested in product rights, brands, customer contracts and goodwill. Total interest-bearing liabilities amounted on September 30, 2015 to SEK 234,5 million (193,9) distributed on long term debt SEK 195,4 million (126,8) and short-term interest-bearing liabilities SEK 39,2 million (67,2). During the period one new loan from Norrlandsfonden was signed totaling SEK 25,0 million. In connection to the new loan a convertible loan from Norrlandsfonden was resolved to the amount of SEK 36,8 million. In connection with the acquisition of Datamann A/S SEK 54,9 millon was used from the credit facility. Equity attributable to Vitec's shareholders amounted to SEK 256,8 million (239,8). The equity ratio was 32 % (35). The payment of dividend after the Annual General Meeting in May amounted to SEK 3,35 per share, totaling SEK 19,7 million. VITEC INTERIM REPORT JANUARY-SEPTEMBER

4 SIGNIFICANT EVENTS DURING THE THIRD QUARTER July 1-2: Vitec acquired Datamann A/S in Denmark and Infoeasy AS in Norway Vitec Software Group AB (publ) did on July 1 agree to acquire 100 % of the Danish software company Datamann A/S, whose main product is an industry-specific software for the Danish car industry. Sales for the financial year 2013/-14 where 29,5 million DKK with approximately 70 % recurring revenue and EBITDA of 4,3 million DKK. The result for the financial year /-15 is estimated to be 6 million DKK at EBITDA-level and net sales is expected to be 31 million DKK. Payment was cash 44,4 million DKK, of which 9,4 million DKK is compensation, DKK for DKK, for the excess liquidity. The acquisition is expected to directly result in increased earnings per share of Vitec. Completion took place immediately. On July 2 Vitec agreed to acquire 100 % of the Norwegian software company Infoeasy AS, whose product is an industry-specific software for the Norwegian automotive industry. Sales for the financial year were 21,8 million NOK with approximately 50 % recurring revenue and EBITDA of 1,9 million NOK. Payment was cash 15,4 million NOK, of which 5.4 million NOK is compensation, NOK for NOK, for the excess liquidity. The acquisition is expected to directly result in increased earnings per share of Vitec. Consolidation took place from July 1. July 3: Maria Skogelid new marketing manager at Vitec Maria Skogelid takes on September 1 is a new position as Marketing Director of Vitec, with Umeå as home base. She has previously worked in brand management, and marketing in areas such as dairy and insurance. Maria comes from Norrmejerier, where she worked as a marketing for the export brands Västerbottenost and Gainomax. VITEC INTERIM REPORT JANUARY-SEPTEMBER

5 OPERATIONS Result overview for segments, TSEK Vitec Group operations are controlled and organized in seven business units. For more information on each business unit, refer to The business units are; Estate Agent, Real Estate, Media, Energy, Health, Auto and Finance & Insurance. Segment Mäklare (BA Estate Agent): The segment consists of Vitec Mäklarsystem AB, Capitex AB, Vitec IT-Makeriet AS, the Group Vitec Midas AS and from March 2 Fox Publish AS and ADservice Scandinavia AB. The business unit provides software for real estate agents. Segment Fastighet (BA Real Estate): The segment consists of Vitec Fastighetssystem AB, Vitec Förvaltningssystem AB and Vitec Capifast AB. The business unit offers software applications for building owners, construction and management companies, property managers and real estate developers. Segment Media (BA Media): The segment consists of 3L Media AB, Vitec Veriba AB and Retail i Linköping AB. The business unit offers software for newspaper companies and a few managed solutions for distribution and retail. Segment Energi (BA Energy): The segment consists of Vitec Energy AB. The business unit offers a forecasting software system of electricity and heat demand, wind power, and software supporting the technical management and maintenance of the energy distribution networks. Segment Hälsa (BU Health): The segment consists of the Group Acuvitec FDS Oy and IMHO Holding Oy. The business unit offers software for electronic medical records used for health care in Finland. The companies were acquired February 28. Segment Auto (BA Auto): The segment consists of Vitec AutoData Norge AS and Infoeasy AS in Norway and Datamann A/S in Denmark. The business area offers industry specific business applications for the automotive sector with support for sales, purchasing, inventory control, billing, accounting and salary. Its customers include importers, wholesalers, retailers, distributors and retailers but also workshops. AutoData Norge AS was acquired April 24 and Datamann A/S and Infoeasy AS 1:st and 2:nd of July 2015 respectively. Segment Finans & Försäkring (BA Finance & Insurance): The segment consists of Vitec Capitex AB and the Group Aloc A / S. The business area offers systems for tax calculations, pension calculations and housing calculations and operational systems for the Nordic financial and insurance sector. The group Aloc A/S was acquired June 30. VITEC INTERIM REPORT JANUARY-SEPTEMBER

6 Segment reporting* PROFIT BEFORE ACQUISITION_RELATED COSTS SEGMENT NET SALES (SEK THOUSENDS) (SEK THOUSENDS) 2015 jul-sep jul-sep jul-sep jul-sep 2015 BA Estate Agent BA Real Estate BA Media BA Energy BA Health BA Auto BA Finance & Insurance Shared Vitec Group Acquisition-related costs Operating profit after acquisitionrelated costs Net financial income/expence Profit before tax Due to non-recurring acquisition-related costs, progress in the business areas are difficult to follow. For this reason, the operating profit has been split into operating profit before and after acquisition-related costs. Sales by geography The table below shows the Group's net sales translated to MSEK based on the customer's location. MARKET NET SALES (MSEK) 2015 % % jandec % Sweden 222,2 49,6% 222,5 63,5% 298,2 60,6% Norway 105,9 23,6% 76,4 21,8% 106,1 21,6% Finland 48,4 10,8% 31,8 9,1% 46,9 9,5% Denmark 69,3 15,5% 17,0 4,9% 37,3 7,6% Other Europé 2,4 0,5% 2,3 0,7% 2,9 0,6% Rest of world 0,1 0,0% 0,4 0,1% 0,6 0,1% SUM 448,3 100,0% 350,4 100,0% 492,0 100,0% Market 11% 15% 24% 50% Sweden Norway Finland Denmark Rest of Europé VITEC INTERIM REPORT JANUARY-SEPTEMBER

7 Net sales Jan-Sep /BA (MSEK) Oper. profit* Jan-Sep /BA (MSEK) Estate Agent Real Estate Media Energy Health Auto Finance & Ins. 0 Estate Agent Real Estate Media Energy Health Auto Finance & Ins. *Före förvärvsrelaterade kostnader * Before acquisition-related costs. Business Area Estate Agent, January-September 2015 Total revenues amounted to SEK 155,5 million (140,7) an increase of 10 %. License revenues decreased and amounted to SEK 1,8 million (1,9). Recurring revenue increased by 14 % to SEK 146,0 million. Service revenue declined 29 % to SEK 7,0 million. Recurring revenue as a percentage of net sales was 94 % (91). Operating margin decreased and amounted to 16 % (17). As of March 2, operations in Fox Publish AS and ADservice Scandinavia AB were consolidated in the business area. Business Area Real Estate, January-September 2015 Total revenues amounted to SEK 101,6 million (96,9), an increase of 5 %. License revenues declined by 12 % and amounted to SEK 6,8 million. Recurring revenue increased 8 % to SEK 60,6 million. Services revenue increased by 10 % to SEK 34,2 million. Recurring revenue as a percentage of net sales was 60 % (58). Operating margin increased to 18 % (14). Business Area Media, January-September 2015 The total revenues amounted to SEK 8,2 million (18,0), a decrease of 54 %. License revenue declined 88 % to SEK 0,6 million. The comparative period includes a one-time sale of a software license to Eniro. Recurring revenue declined 38 % to SEK 3,5 million. Service revenues declined 42 % to SEK 4,1 million. Recurring revenue as a percentage of net sales was 43 % (32). Operating margin increased and amounted to 27 % (2). Business Area Energy, January-September 2015 The total revenues amounted to SEK 17,3 million (17,1), an increase of 1 %. Recurring revenue increased 8 % to SEK 12,9 million. Service revenues decreased 12 % to SEK 4,4 million. Recurring revenue as a percentage of net sales was 75 % (70). Operating margin increased to 34 % (29). VITEC INTERIM REPORT JANUARY-SEPTEMBER

8 Business Area Health, January-September 2015 Total revenues for the period amounted to SEK 46,1 million. License revenues amounted to SEK 0,3 million. Recurring revenue amounted to SEK 36,0 million and services to SEK 9,2 million. Comparative figures are not available. Recurring revenue as a percentage of net sales was 78 %. The operating margin was 13 %. Business Area Auto, January-September 2015 The total revenues amounted to SEK 45,0 million. Recurring revenue amounted to SEK 38,9 million, services to SEK 3,7 million and other SEK 0,2 million. Comparative figures are not available. Recurring revenue as a percentage of net sales was 87 %. Operating margin was 16 %. As of July, operations in Datamann A/S and Infoeasy AS were consolidated in the business area. Business Area Finance & Insurance, January-September 2015 The total revenue amounted to SEK 74,4 million (29,6), an increase of 151 %. License revenues increased 216 % to SEK 5,5 million. Recurring revenue increased by 136 % to SEK 57,1 million. Service revenues increased by 215 % to SEK 11,2 million. Recurring revenue as a percentage of net sales was 77 % (82). Operating margin increased to 14 % (1). Operations in Aloc A / S was consolidated in the business area as of June 30, and is the reason for the strong growth. Risks and uncertainties Vitec s significant risks and uncertainties are described in the Directors' Report in the Annual Report for under the heading "Risks and Uncertainties" on pages 36-37, note 1 under "Assumptions and estimates" on page 54 and Note 20, "Financial risks and their management "on pages No significant changes have occurred since then. The Parent Company Net sales amounted to SEK 68,2 million (40,0) and consisted primarily of sales to subsidiaries for services rendered. Profit after tax amounted to SEK 7,6 million (-5,4). The Parent Company is exposed to the same risks and uncertainties that the group in general, see above under section Risks and uncertainties. Transactions with related parties No significant related party transactions have occurred in the Group and Parent Company during the period. VITEC INTERIM REPORT JANUARY-SEPTEMBER

9 Financial reports, summary CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME SEK (thousends) 2015 jul-sep jul-sep 2015 jan-dec OPERATING REVENUE Recurring revenues License revenues Service revenues Other revenues NET SALES Capitalized development costs Unrealized exchange gains Unrealized exchange gains* Sum OPERATING EXPENSES Goods for resale Subcontractors and subscriptions Other external expenses Staff costs Depreciation of tangible and intangible assets Impariment of Goodwill Unrealized exchange losses TOTAL COSTS OPERATING PROFIT BEFORE ACQUSITION-RELATED COSTS Acqusition-related costs OPERATING PROFIT AFTER ACQUSITION-RELATED COSTS Income from financial investments Financial income Financial expense TOTAL FINANCIAL ITEMS PROFIT BEFORE TAX Tax NET PROFIT OTHER COMPREHENSIVE INCOME, ITEMS THAT MAY BE RECLASSIFIED TO PROFIT OR LOSS Currency translation differences TOTAL OTHER COMPREHENSIVE INCOME FOR THE PERIOD TOTAL COMPREHENSIVE INCOME FOR THE PERIOD PROFIT FOR THE PERIOD ATTRIBUTABLE TO -Shareholders of the Parent Company TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO -Shareholders of the Parent Company EARNING PER SHARE -Before dilution (SEK) 3,25 2,02 9,02 5,47 8,76 -After dilution (SEK) 3,21 1,92 8,93 5,18 8,39 Average number of shares Number of shares after dilution VITEC INTERIM REPORT JANUARY-SEPTEMBER

10 Financial reports, summary CONSOLIDATED STATEMENT OF FINANCIAL POSITION SEK (thousends) ASSETS FIXED ASSETS Intangible assets Goodwill Capitalized development costs Software Brands Product rights Customer agreements Tangible fixed assets Buildings Equipment Financial Assets Other long-term receivables Deferred tax TOTAL FIXED ASSETS CURRENT ASSETS Inventories Receivables Short-term investments Cash and equivalents TOTAL CURRENT ASSETS TOTAL ASSETS EQUITY AND LIABILITIES EQUITY LONG-TERM LIABILITIES, INTEREST BEARING LONG-TERM LIABILITIES, NON-INTEREST BEARING SHORT-TERM LIABILITIES, INTEREST BEARING SHORT-TERM LIABILITIES, NON-INTEREST BEARING TOTAL EQUITY AND LIABILITIES VITEC INTERIM REPORT JANUARY-SEPTEMBER

11 Financial reports, summary CONSOLIDATED STATEMENT OF CHANGES IN EQUITY SEK (thousands) 2015 jul-sep jul-sep 2015 jan-dec EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT COMPANY At beginning of period Option element convertible bond Conversion bonds Redemption bonds Issue of new shares after issue costs* Dividend Total comprehensive income for the period At end of period * The issue expenses amounted to SEK 1,4 millon. VITEC INTERIM REPORT JANUARY-SEPTEMBER

12 Financial reports, summary CONSOLIDATED STATEMENT OF CASH FLOWS SEK (thousands) jul-sep jul-sep jan-dec OPERATING ACTIVITIES Operating profit Adjustments for items not included in cash flow Depreciation/amortisation and impairment Interest received Interest paid Tax paid CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN WORKING CAPITAL Changes in working capital Change in inventories Change in operating receivables Change in operating liabilities CASH FLOW FROM CURRENT OPERATIONS Investment activities Change in long-term receivables Acquisition of subsidiaries, net* Acquisition of intangible assets and capitalized development costs Acqusition of tangible assets CASH FLOW FROM INVESTMENT ACTIVITIES FINANCING ACTIVITIES Dividend Redemption convertible loan New loans Amortisation of loans Issue of new shares CASH FLOW FROM FINANCING ACTIVITIES CASH FLOW FOR THE PERIOD CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD EXCHANGE-RATE DIFFERENCES IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT END OF PERIOD * Payment for acquisition of subsidiaries in 2015 consisted of proceeds for Fox Publish AS, ADservice Scandinavia AB, Datamann A/S and Infoeasy AS. Payment for acquisition of subsidiaries in consisted of proceeds for Acute, Autodata and Aloc. All acquisitions related to the entire outstanding share capital and meant that control was obtained in all companies. VITEC INTERIM REPORT JANUARY-SEPTEMBER

13 Financial reports, summary INCOME STATEMENT, PARENT COMPANY SEK (thousands) 2015 jul-sep jul-sep 2015 jan-dec NETE SALES Operating costs OPERATING RESULT RESULT FROM FINANCIAL INVESTMENTS Income from shares in group companies Financial income Financial expense PROFIT AFTER FINANCIAL NET Appropriations PROFIT BEFORE TAX Tax NET PROFIT The results of the period are consistent with the total comprehensive income. BALANCE SHEET, PARENT COMPANY SEK (thousands) ASSETS FIXED ASSETS Intangible assets Tangible assets Financial assets TOTAL FIXED ASSEST CURRENT ASSETS Receivables Short-term investments Cash and equivalents TOTAL CURRENT ASSETS TOTAL ASSETS EQUITY AND LIABILITIES EQUITY UNTAXED RESERVES LONG-TERM LIABILITIES SHORT-TERM LIABILITIES TOTAL EQUITY AND LIABILITIES VITEC INTERIM REPORT JANUARY-SEPTEMBER

14 ANNOTATIONS ANN 1 ACCOUNTING AND VALUATION PRINCIPLES AND OTHER COMMENTS This report has been prepared in accordance with IAS 34 Interim Financial Reporting. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, IFRS, as adopted by the EU and the Swedish Annual Accounts Act. The parent company financial statements have been prepared in accordance with the Annual Accounts Act and recommendation RFR 2 Accounting for Legal Entities. The new standards, amendments and interpretations to existing standards that have entered into force in 2015, has had no impact on the consolidated financial position or financial reports. The accounting policies and calculation methods are unchanged from the one described in the Annual Report for. The additional purchase price for Acuvitec OY has been written down by SEK 11,2 million. The correction has been recognized as revenue and as impairment of goodwill in accordance with IFRS 3:58. The correction has no effect on reported profit. ANN 2 INVESTMENTS Investments amounted to SEK 48,5 million in intangible assets, including capitalized work and SEK 8,2 million in tangible assets. Through the acquisition of Fox Publish AS, ADservice Scandinavia AB, Datamann A/S and Infoeasy AS SEK 100,1 million was added in product rights, brands, customer contracts and goodwill. ANN 3 LONG-TERM DEBT Long-term interest-bearing debt consists of bank loans SEK 181,9 million and a convertible loan SEK 13,4 million. Long-term non-interest bearing liabilities consist of deferred taxes SEK 89,6 million, pension liability SEK 11,4 million, a non-current portion of additional purchase price Fox Publish 4,0 million and other long-term liabilities SEK 0,1 million. ANN 4 CONVERTIBLE DEBENTURE Convertible debentures are included in long-term interest bearing liabilities: Loan 1501 (long-term debt interest bearing liabilities, staff). SEK 13,4 million. Duration of the loan is January 1, December 31, The interest rate is Stibor 180. The conversion price is SEK 159. Conversion may be requested 1 November to 30 November The share capital may upon conversion increase by a maximum of SEK. At full conversion the dilution of about 1.5% of the share capital and 0.7% of the votes. The convertible program was registered by the Swedish Companies Registration Office February 11, ANN 5 EQUITY Consolidated shareholders' equity as of September 30, 2015 was SEK 256,7 million. The registered shares amounted to A-shares with voting rights 10 (ten) and Series B-shares with voting rights 1 (one). VITEC INTERIM REPORT JANUARY-SEPTEMBER

15 ANN 6 ACQUISITION ANALYSIS Acquisition Fox Publish AS and ADservice Scandinavia AB On March 2, 2015 Vitec acquired all the shares in Fox Publish AS and ADservice Scandinavia AB for a cash payment of SEK 15,0 million respectively SEK 0,4 million. The company develops and provides a publication system for real estate agents. Adservice Scandinavia is a sales company for the Swedish market. The companies are consolidated as of the acquisition date. The goodwill is not deductible for tax purposes and is considered to be attributable to the expected profitability, complementary expertise and synergies expected in the form of joint development of the Group's products. The acquisition increases Vitec's presence on the Norwegian software market. The maximum purchase price is SEK 24,1 million. The acquisition-related expenses amounted September 30 to SEK 0,1 million and are reported as other external costs of comprehensive income. From the acquisition date until September 30 the revenues amounts to SEK 15,5 million. If consolidation had occurred at the beginning of the year, the companies would have brought the Group an additional approximately 5,0 million in revenue. The following purchase price allocation is preliminary. Preliminary purchase price allocation (SEK thousands) Fox Publish AS and ADservice Scandinavia AB Fair value adjustment Fair value recognized in the Group Brands Product Rights Customer Agreement Intangible fixed assets Tangible fixed assets Financial fixed assets 5-5 Current receivables Cash and cash equivalents Deferred tax liabilities Current liabilities Net identifiable assets and liabilities Goodwill on consolidation Total The Group s acquisition value Calculation of net cash outflow Fair value Group s acqcuisition value Debt aditional purchase price Cash acquired 983 Net cash outflow VITEC INTERIM REPORT JANUARY-SEPTEMBER

16 Acquisition of Datamann A/S On July 1, 2015 Vitec acquired all the shares in Datamann A/S for a cash payment of SEK 54,9 million. The company s main product is a software for the Danish automotive sector. The company is consolidated as of the acquisition date. The goodwill is not deductible for tax purposes and is considered to be attributable to the expected profitability, complementary expertise and synergies expected in the form of joint development of the Group's products. The acquisition increases Vitec's presence on the Danish software market and provide access to new markets. The acquisition-related expenses amounted September 30 to SEK 1,8 million and are reported as other external costs of comprehensive income. From the acquisition date until September 30 the revenues amounts to SEK 9,9 million. If consolidation had occurred at the beginning of the year, the company would have brought the Group an additional approximately 19,2 million in revenue. The following purchase price allocation is preliminary. Preliminary purchase price allocation (SEK thousands) Datamann A/S Fair value adjustment Fair value recognized in the Group Brands Product Rights Customer Agreement Tangible fixed assets Inventories Current receivables Cash and cash equivalents Deferred tax liabilities Current liabilities Net identifiable assets and liabilities Goodwill on consolidation Total The Group s acquisition value Calculation of net cash outflow Fair value Group s acqcuisition value Cash acquired Net cash outflow VITEC INTERIM REPORT JANUARY-SEPTEMBER

17 Acquisition of Infoeasy AS On July 2, 2015 Vitec acquired all the shares in Infoeasy AS for a cash payment of SEK 16,3 million. The company s main product is a software for the Norwegian automotive sector. The company is consolidated as of the acquisition date. The goodwill is not deductible for tax purposes and is considered to be attributable to the expected profitability, complementary expertise and synergies expected in the form of joint development of the Group's products. The acquisition increases Vitec's presence on the Norwegian software market and provide access to new markets. The acquisition-related expenses amounted September 30 to SEK 0,5 million and are reported as other external costs of comprehensive income. From the acquisition date until September 30 the revenues amounts to SEK 5,1 million. If consolidation had occurred at the beginning of the year, the company would have brought the Group an additional approximately 12,2 million in revenue. The following purchase price allocation is preliminary. Preliminary purchase price allocation (SEK thousands) Infoeasy AS Fair value adjustment Fair value recognized in the Group Brands Product Rights Customer Agreement Intangible fixed assets Tangible fixed assets Financial fixed assets Current receivables Cash and cash equivalents Deferred tax liabilities Long-term liabilities Current liabilities Net identifiable assets and liabilities Goodwill on consolidation Total The Group s acquisition value Calculation of net cash outflow Fair value Group s acqcuisition value Cash acquired Net cash outflow VITEC INTERIM REPORT JANUARY-SEPTEMBER

18 SIGNATURES Umeå, October Lars Stenlund (CEO) The Board: Jan Friedman, Kaj Sandart, Birgitta Johansson-Hedberg, Crister Stjernfelt (Chairman) and Anna Valtonen. VITEC INTERIM REPORT JANUARY-SEPTEMBER

19 INFORMATION Publication The information in this report is such that Vitec Software Group AB (publ.) is obliged to publish under the Securities Market Act and/or the Financial Instruments Trading Act. The information was released for publication on October 21, 2015 at 08:30 CET. Contact CEO Lars Stenlund, , CFO Maria Kröger, , Financial information Can be ordered from: Vitec Software Group AB (publ), Investor Relations, PO-Box 7965, S Umeå, Sweden Phone: Financial information is published on immediately after publication. Financial calendar Year End Report 2015 ( 08:30 CET) Interim Report January - March 2016 ( 13:00 CET) AGM 2015 ( 17:30 CET) Corporate registration Vitec Software Group AB (publ.). Org.no VITEC INTERIM REPORT JANUARY-SEPTEMBER

20 KEY FIGURE DEFINITIONS Return on capital employed Operating profit as a percentage of average capital employed attributable to parent company shareholders. Return on equity Profit/loss for the period, attributable to parent company shareholders, as a percentage of average shareholders' equity, attributable to parent company shareholders. Value added per employee Operating income plus depreciation and staff costs relative to the average number of employees. Adjusted equity per share Equity attributable to shareholders in proportion to the number of shares issued at the closing-day. Cash flow from operating activities per share Cash flow from operating activities divided by the average number of shares on the market during the period. Sales per employee Net revenue, including other operating income in relation to average number of employees. P/E ratio Share price at year-end divided by earnings per share. P/JEK The share price at the balance sheet date multiplied by the number of shares issued on the closing date in relation to the equity attributable to the parent company's shareholders. P/S The share price at the balance sheet date multiplied by the average number of shares in relation to net sales. Earnings per share Profit/loss for the period, attributable to parent company shareholders, divided by the average number of shares on the market attributable to parent company shareholders. Operating profit Operating profit as a percentage of net sales. Solidity Shareholders' equity, including equity attributable to non-controlling interests in relation to total assets. Debt ratio Average liabilities in relation to average shareholders' equity and non-controlling interests. Profit margin Net profit after tax through the net turnover. VITEC INTERIM REPORT JANUARY-SEPTEMBER

21 DIAGRAMS Net sales (MSEK) Recurring part (%) 160 MSEK 100 % 140 MSEK 120 MSEK 90 % 100 MSEK 80 % 80 MSEK 60 MSEK 70 % 40 MSEK 60 % 20 MSEK 0 MSEK 50 % Q3-12 Q3-13 Q3-14 Q3-15 Distribution Net Sales Jan-Sep 2015 Net sales (MSEK) Oper. margin (%) 160 MSEK 30 % 140 MSEK 25 % 120 MSEK 100 MSEK 20 % 80 MSEK 15 % 60 MSEK 10 % 40 MSEK 20 MSEK 5 % 0 MSEK 0 % Q3-12 Q3-13 Q3-14 Q3-15 Distribution Profit Jan-Sep 2015 Estate Agent 35 % Real Estate 23% Finance & Ins. 17 % Health 10 % Auto 10 % Energy 4 % Media 2 % Estate Agent 33 % Real Estate 24 % Finance & Ins. 14 % Energy 8 % Auto 9 % Health 8 % Media 3 % JEK per share (SEK) Cash flow per share (SEK) 50 SEK 25 SEK 40 SEK 20 SEK 30 SEK 15 SEK 20 SEK 10 SEK 10 SEK 5 SEK 0 SEK SEK Profit per share (SEK/share) Net sales (MSEK) 10,0 SEK 600 MSEK 8,0 SEK 500 MSEK 6,0 SEK 4,0 SEK 2,0 SEK 0,0 SEK MSEK 300 MSEK 200 MSEK 100 MSEK 0 MSEK VITEC INTERIM REPORT JANUARY-SEPTEMBER

22 A SOFTWARE COMPANY IN GROWTH VERTICAL MARKET SOFTWARE Vitec is a software company that offers industry specific business solutions to the Nordic market. The company, with operations in Sweden, Norway, Finland and Denmark is growing in the mature part of the software industry by consolidating vertical software segments. Its clients include property management companies, construction and real estate companies, banks and insurance companies, energy companies, health companies, companies dealing with car parts and newspaper companies. Group turnover has an annual capacity of 660 million SEK and has approximately 470 employees. Vitec Software Group AB (publ.) is listed on Nasdaq OMX Stockholm. Our mission is to provide industry-specific business solutions where our strategy is to focus on niches where there are needs that not as cost-effective can be met by general ERP-systems. In these niches we strive for a leading position. Our offer includes: proprietary software SaaS (Software as a Service), support and maintenance specialist services The current market is made up to 50 % of Sweden, 24 % of Norway, 15 % of Denmark and 11 % of Finland. LONG CUSTOMER RELATIONSHIPS Vitec formed in 1985 and has since 1998 been a public company based on software solutions. With our products and related services, we act in the long term, build trust and create confidence among our customers. We create value for customers through a customer-focused approach and a well-tailored program offering that supports, develops and increases the profitability of our customers' daily work processes. BUSINESS MODEL WITH RECURRING REVENUE Recurring contract revenues are a central part of the Vitecs business model. Recurring contract revenue includes recurring revenues for the use of our software, access to our customer service and new refined versions of our software. Technology trend today is for a more modern model in which the functionality of the software is delivered over the Internet. This movement means that our offer is extended to include the operation of the software and the data storage. This increases the proportion of recurring revenue contracts, which gives us a stable, predictable and recurring revenue volume while providing our customers with a secure overall offering. A business model with a high proportion of recurring revenue also gives us a good annual operating capital and reduces sensitivity to economic downturns. High proportion of recurring revenue contracts also provide strong cash flows, which is an important prerequisite for continued growth. PROFITABLE GROWTH Vitec has a pronounced growth strategy with a combination of acquisitions and organic growth. Growth is important because it gives us energy and creates new opportunities. Acquisitions are also important to achieve cost and volume advantages and are also strategically important for the expansion to new markets and niches. Our acquisitions were initially made in Sweden in the niches in which we first appeared, but has gradually expanded to include new niches and new markets. Today we are a software company that offers specific business throughout the Nordic market and our business is established in Sweden, Norway, Finland and Denmark. We identify and evaluates acquisition targets in all Nordic countries. During our long history, we have been in constant growth and every year improved our results. We have, however, held fast to our strategy to operate within specialized software niches to create sustainable and profitable growth. VITEC INTERIM REPORT JANUARY-SEPTEMBER

23 SNDR; Vitec, Box 7965,S UMEÅ KEY FIGURES 2015 jan-dec Net sales (TSEK) Business Area Estate Agent (TSEK) Business Area Real Estate (TSEK) Business Area Energy (TSEK) Business Area Media (TSEK) Business Area Health (TSEK) Business Area Auto (TSEK) Business Area Finance & Insurance (TSEK) Shared (TSEK) Growth (%) 28% 26% 32% Profit after financial items (TSEK) Profit after tax (TSEK) Profit after tax attributable to owners of the parent (TSEK) Profit growth attributable to owners of the parent (%) 75% 31% 62% Profit margin (%) 12% 9% 10% Operating margin (%) 16% 13% 14% Total assets (tkr) Solidity (%) 32% 35% 34% Equity ratio after full conversion (%) 33% 38% 37% Degree of indebtedness (times) 2,14 1,61 1,70 Return on capital employed (%) 21% 16% 20% Return on equity (%) 29% 12% 23% Sales per employee (TSEK) Value added per employee (TSEK) Personnel expenses per employee (TSEK) Average numbers of employees (number) Adjusted shareholders' equity per share (JEK) (SEK) 43,66 41,35 44,24 Earnings per share (SEK) 9,02 5,47 8,76 Earnings per share after dilution (SEK) 8,93 5,18 8,39 Paid dividends per share* (SEK) 3,35 2,75 2,75 Cash flow per share (SEK) 17,66 15,08 22,00 P/E 20,4 20,4 15,1 P/JEK 6,64 3,34 2,99 P/S 2,36 1,72 1,51 Calculation bases: Results used for the calculation of earnings per share (TSEK) Cash flow for the calculation of cash flow per share (TSEK) Average number of shares (weighted average) (psc) The number of shares after dilution (psc) The number of shares issued on the closing date (psc) Share price at end of period (SEK) ,5 * Values for rolling 12 months. Vitec Software Group is a software company that offers industry specific business applications on the Nordic market. The Company, with operations in Sweden, Norway, Finland and Denmark is growing in the mature part of the software industry by consolidating vertical software segments. Clients include facility management companies, construction and real estate companies, banks and insurance companies, utilities and energy traders, healthcare companies, car spare part dealers and newspaper companies. Vitec is listed on Nasdaq OMX Stockholm. Contact: Lars Stenlund, CEO Mob: VITEC INTERIM REPORT JANUARY-SEPTEMBER