Vitec Software Group Vertical Market Software Lars Stenlund, VD
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
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.
Business Strategy Vertical Market Software Subcontractors Low dependence on third party vendors, self-development predominate. Customers Markets with one hundred to several thousand customers. Not billion markets. High entry barriers Mission critical systems with high exchange cost and long lead times in developing. The competition Small competitors with limited resources to grow, sometimes without "professional" management. Customers option Limited and less cost-effective solutions from generalists and consultants.
Growth Strategy 1 - Acquire Identify and select vertical market acquisition candidates and negotiate and acquire. Capital 2 - Refine Create operational improvements and establish strategic direction. Increase Cash Flows. 3 - Grow Implement additional acquisitions and organic growth.
A selection of our customers
Selection of customers Property managers
Business Area Fastighet Rental coupon Tenant pages Apartment rentals
Selection of customers - Mäklare
Business Area Mäklare Purchase Agreement Data for www.hemnet.se Appl. on the brokers website
Selection of customers - Energi
Business Area Energi Power load forecasts Windpower forecasts Network calculations of electricity load District heat pipe flow
Selection of customers Finans och Försäkring
Business Area Finans och Försäkring Pension Calculations Mortgage calculations
Selection of customers - Media
Business Area Media SMP Social Media Platform
History of successful growth Milestones 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 350 300 250 200 150 100 50 0 Turnover (million SEK)
Strong Earnings Growth Profit before tax (million SEK) 25 20 15 22,4 %/year 10 5 0 2003 2004 2005 2006 2007 2008 2009 2010
( million SEK ) Revenue Growth Growth is driven both organically and through acquisition of new business areas 350 300 250 200 150 Capitex 3L System Mäklarsystem Media Energi Fastighet 25%/år 100 50 0 2003 2004 2005 2006 2007 2008 2009 2010
Growth while maintaining profitability 30% 25% 20% 15% 10% 5% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 Return on capital employed Return on equity
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
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.
Turnover (million SEK) Repetitive portion (%) Turnover and repetitive portion per quarter 120,0 100,0 120,0 100,0 80,0 60,0 40,0 20,0 0,0 Q3-08 Q3-09 Q3-10 Q3-11 Turnover Repetitive portion 80,0 60,0 40,0 20,0 0,0
Turnover (million SEK) Opetating margin (%) Revenue and operating margin by quarter 120 100 30 25 80 60 40 20 0-20 Q3-08 Q3-09 Q3-10 Q3-11 Turnover (million SEK) Operating margin % 20 15 10 5 0-5
Income Statement January September 2011 Income Statement OPERATING REVENUE Jan-Sept 2011 Jan-Sept 2010 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 Recurring Service Licence Other 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 4 3 2 1 0 Earnings per share (SEK) 2004 2005 2006 2007 2008 2009 2010
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 25 20 15 10 5 0 Owners equity per share (SEK) 2004 2005 2006 2007 2008 2009 2010
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 8 7 6 5 4 3 2 1 0 Cash earnings per share (SEK/share) 2004 2005 2006 2007 2008 2009 2010
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 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 2010 Jan-Sept Revenue shares business areas January - September 2011 Performance parts business areas January - September 2011 AO Mäklare 38 % AO Fastighet 19 % AO Energi 5 % AO Media 5 % AO Capitex 5 % 3L System AB 27 % AO Mäklare 73 % AO Fastighet 25 % AO Energi 11 % AO Media 0 % AO Capitex 9 % 3L System AB 6 %
Board Nils-Eric Öquist Chairman Carl-Erik Nyquist Crister Stjernfelt Kaj Sandart Olov Sandberg Jan Friedman Birgitta Johansson- Hedberg
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
Value creation for shareholders
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.
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 Vertical Market Software www.vitec.se Lars Stenlund, VD