- 05.08.2015 esoft systems TRADING UPDATE for the period from January 1st 2015 to June 30th 2015 THIS IS A TRANSLATED VERSION OF THE ORIGINAL FIRST NORTH MESSAGE PUBLISHED TO THE STOCK MARKET. PLEASE READ THE DANISH VERSION FOR LEGALLY BINDING INFORMATION. CVR-nr. 25 36 21 95
2-17% growth in turnover YOY - Equity close to 20 MDKK - New IT system implemented - M&A activities being planned - The Danish organisation has been strengthened - Esoftflow, 8 years in Vietnam Turnover The esoft group has had an 8 MDKK increase in turnover compared to the same period in 2014, equivalent to 17% growth, which is considered satisfactory. An overall increase in activity has contributed to the increased turnover. A number of new clients have been welcomed during the period. The subsidiary in Vietnam experiences a considerable growth with an increased number of customers, and the company is preparing for further growth. From several corners of the world there is interest in the products from esoftflow. The first big customers from The Netherlands have signed collaboration agreements with esoftflow. There are ongoing negotiations with a number of interesting customers that are expected to generate growth. The growth potential exceeds the capital resources in the group, and different solutions will be investigated. The Swedish subsidiary has a new managing team who will focus on increasing the company s growth. Interest is noticeable and growth in the Swedish subsidiary is expected in the years to come. The subsidiary in Barcelona has almost doubled its volume in 2015 compared to 2014 and is expected to continue its growth. With a new IT platform the company is prepared for further expansion and the position as market leader will be consolidated through more innovation in the years to come. The company has the ability to approach new markets with a full service concept, and alternatively, a market can be targeted by delivering a platform to already operating suppliers of real estate marketing solutions - in any country of the world. The esoft group today operates in a number of countries: Australia, New Zealand, France, England, Norway, Sweden, Denmark, The Netherlands, Canada, United Arab Emirates and the United States (Louisiana, Florida, New York, California, Illinois, Utah, Maryland, Colorado) and several smaller customers around the globe. In total, 20-30.000 images are processed every day, 6 days a week. Quality, service and innovation are the company s core competencies. Result Launch of the new IT system on June 1st 2015 has resulted in extraordinary expenses in the period. Cost reductions will be made in the second half of the year. Further optimisations will be made following implementation of new workflows across the group. An urealised foreign exchange loss from the first quarter amounting to MDKK 0,5 related to the worldwide trade of esoftflow, is having a negative impact on the result. The result year to date is below budget.
3 New IT system All old systems and dependencies on solutions based on old technologies have been replaced by a new IT system built on a standard Microsoft Axapta platform and a logistic setup from FLS (http://www.fastleansmart.com/). In addition to this, the system has an e-commerce frontend and backend. Everything is integrated with inhouse development. The whole system is placed in the Amazon Cloud and is fully scalable. The system can be scaled to hundreds of servers for shorter or longer periods of time by which the platform offers a big cost saving potential and unique scalability. The customers will get a state of the art platform that allows us to grow with them - without limitations. A platform with automatic unit testing and a technological setup expected to attract some of the most skilled developers and IT specialists. A decisive step also for the recruitment of the company s future CTO. M&A in the pipeline In 2015, the primary focus has been on the completion and launch of the new IT system. There have been considerable investments in new strategic products expected to bring strategic growth. A large growth potential has been identified, requiring a reinforcement of the financial setup and further strengthening of the organisation. It needs to be assessed whether one or more partners could contribute to this part of the growth plans. There is no immediate deadline for this, however, it is expected that transparency concerning these plans will increase the potential interactions with relevant partners, in particular from abroad. The company is looking for one or more partners, and the board is considering whether to attach professional advisors. The aim is, furthermore, for founder and main shareholder René Dines Hermand (CEO) to focus more on business development. So far innovation has been the main driver for the achieved results. This given the fact that the group now has nearly 600 employees and the need to ensure the operation of the different subsidiaries. The board considers this to be a strategic step to consolidate the current turnover and ensure continuous optimisation in order to guarantee customer satisfaction (99,3% customer satisfaction in 2015). Organisational strengthening in Denmark The organisation in Denmark will be strengthened with a new sales management and a new operations manager who will handle the activities in the Danish company.
4 Key figures / TDKK Figures for the period 1.1.15-30.6.15 * 1.1.14-30.6.14 * Revenue 55.972 47.904 EBIT 2.767 4.385 Financial income/expense -503-140 EBT 2.294 4.260 Total assets 33.585 32.040 Equity 19.776 16.971 8 years with esoftflow per August 1st 2015 The company in Vietnam was established in 2006 and has since had a vision of being the world s leading image processing platform. This aim has now been accomplished. Today, there is approximately 500 employees, a scalable IT setup and lots of innovation. Further growth is expected. In the years to come, the real estate agents will have an even bigger need for standing out in the market and offer their customers unique solutions. Cash flow Cash flow from operating activities -2.115 2.476 Cash flow from investing activities -1.094-2.511 Cash flow from financing activities 0-259 Total cash flow -3.209-294 Cash and cash equivalents beginning 6.857 7.250 Cash and cash equivalents end 3.648 6.956 Cash and cash equivalents can be specified as follows Cash and cash equivalents 3.648 6.956 Operating credit facilities 0 0 Equity 1.1.15-30.6.15 * 1.1.14-30.6.14 * Equity beginning 16.735 12.778 Net result for the period 2.294 4.260 Adjustments 747-67 Equity end 19.776 16.971 Key figures 30.6.15 * 30.6.14 * Number of shares 3.506.688 3.506.688 Result before tax per share 0,65 1,21 Book value of equity per share 5,64 4,84 Market price per share 30th June 23,50 16,50 Market value (1.000 DKK) 82.407 57.860 * Not revised figures
5 The board of directors The esoft systems board of directors is composed of: Torben Frigaard Rasmussen (chairman of the board) Michael Vinther René Dines Board decisions Except from the messages already communicated through First North, no fundamental decisions have been taken during the period in question. The company s shareholdings esoft systems a/s holds no shares in the company The board and the management - direct and indirect shareholdings CEO René Dines Hermand: 2.500.000 shares. The company had an average of 280 shareholders in the period in question. The Certified Adviser and the Adviser s employees - direct and indirect shareholdings The Certified Adviser holds no shares in the company Next trading update Next trading update will be published on November 4th, 2015 Further information Please contact CEO René Dines Hermand, tel: +45 20 300 406 or Torben Frigaard Rasmussen (chairman of the board) tel. +45 26 16 33 90 Company address esoft systems a/s Skibhusvej 52C 5000 Odense C Denmark www.esoftsystems.com Certified Adviser Martin Niclasen Ernst & Young P/S Osvald Helmuths Vej 4 2000 Frederiksberg Denmark www.ey.com About esoft systems a/s esoft systems a/s develops innovative solutions for the real estate sector and others with need for high volume image editing and production of visual presentations. Our partners around the globe include individual real estate chains and companies that handle photography for real estate companies. We also service other companies that benefit from our ability to deliver large numbers of commercial photos and presentations. We continually invent new products to give our partners a competitive edge and we are always exploring new ways to enhance our existing products. Esoft systems currently employ more than 500 people and we are continuously growing. Read more at www.esoftsystems.com
esoft systems Skibhusvej 52C DK-5000 Odense C Phone: +45 70 222 466 Fax: +45 63 122 466 info@esoftsystems.com