Bifogade filer
2024 03 15 Interim Report Nepa AB Q4 2023
Kurs & Likviditet
Prenumeration
Beskrivning
| Land | Sverige |
|---|---|
| Lista | First North Stockholm |
| Sektor | Tjänster |
| Industri | Allmänna tjänster |
YEAR-END REPORT
January – December 2023
Q4 in summary
- Annual Recurring Revenue (ARR) decreased by 4.1 percent to SEK 164.0 (170.9) compared to the corresponding period last year.
- Net sales decreased by 2.2 percent, or 4.4 percent in local currencies, to SEK 74.6 (76.3) million.
- Subscription revenue increased by 6.5 percent to SEK 44.8 (42.0) million, and ad hoc revenue from subscribers decreased by 13.6 percent to SEK 16.6 (19.2) million.
- Ad hoc revenue from non-subscribers increased by 10.0 percent to SEK 16.6 (15.1) million.
- Gross profit increased by 6.8 percent, to SEK 58.9 (55.2) million and the gross margin amounted to 79.0 (72.3) percent.
- EBIT increased to SEK -0.7 (-3.8) million and the EBIT margin amounted to -0.9 (-4.9) percent.
- Excluding items affecting comparability of SEK 5.9 (4.5) million, adjusted EBIT amounted to SEK 5.2 (0.7) million.
- Net profit amounted to SEK -0.3 (-4.9) million and Earnings per share amounted to SEK -0.04 (-0.62).
2023 in summary
- Net sales decreased by 6.1 percent, or 7.9 percent in local currencies, to SEK 293.1 (312.1) million.
- The decline in net sales was driven by ad hoc revenue from non-subscribers, which declined by 33.2 percent to SEK 50.2 (75.1) million.
- Subscription revenue increased by 4.2 percent to SEK 177.0 (169.8) million, and ad hoc revenue from subscribers increased by 2.9 percent to SEK 69.2 (67.2) million.
- Gross profit decreased by 7.1 percent, to SEK 219.5 (236.2) million and the gross margin amounted to 74.9 (75.7) percent.
- EBIT decreased to SEK -14.8 (19.7) million and the EBIT margin amounted to -5.0 (6.3) percent.
- Excluding items affecting comparability of SEK 13.8 (9.7) million, adjusted EBIT amounted to SEK -0.9 (29.4) million.
- Net profit amounted to SEK -14.4 (17.5) million and Earnings per share amounted to SEK -1.83 (2.22).
- The Board proposes a dividend of SEK 1.23 (0.56) per share. Last year, total dividends amounted to SEK 1.23.
Business highlights
DURING THE QUARTER
- Solid growth in the core markets of 6.2 percent and return to profitability adjusted for items affecting comparability.
- Completion of the cost savings program, resulting in an annual cost base below the communicated SEK 220 million. It entailed items affecting comparability of SEK 5.9 million in the quarter.
AFTER THE PERIOD ENDED
- Due to a weak financial situation in Nepa APAC and its suboptimal alignment with the Group’s overarching strategic direction, Nepa decided to shut down the subsidiary. It has accounted for less than 3 percent of the Group’s net sales and will not impact the results.
Key financials
| Numbers in SEK million if not stated | Q4 2023 | Q4 2022 | Change | FY 2023 | FY 2022 | Change |
| Annual Recurring Revenue (ARR) | 164.0 | 170.9 | -4.1% | 164.0 | 170.9 | -4.1% |
| Net sales | 74.6 | 76.3 | -2.2% | 293.1 | 312.1 | -6.1% |
| Of which subscription revenue | 44.8 | 42.0 | 6.5% | 177.0 | 169.8 | 4.2% |
| Gross profit | 58.9 | 55.2 | 6.8% | 219.5 | 236.2 | -7.1% |
| Gross margin | 79.0% | 72.3% | 6.7 | 74.9% | 75.7% | -0.8 |
| Adjusted EBIT | 5.2 | 0.7 | 4.5 | -0.9 | 29.4 | -30.3 |
| Adjusted EBIT margin | 7.0% | 1.0% | 6.0 | -0.3% | 9.4% | -9.7 |
| EBIT | -0.7 | -3.8 | 3.1 | -14.8 | 19.7 | -34.4 |
| EBIT margin | -0.9% | -4.9% | 4.1 | -5.0% | 6.3% | -11.3 |
| Net income | -0.3 | -4.9 | 4.6 | -14.4 | 17.5 | -31.9 |
| Profit margin | -0.4% | -6.4% | 6.0 | -4.9% | 5.6% | -10.5 |
| Operating cash flow | 1.8 | 9.3 | -7.4 | 6.1 | 15.9 | -9.8 |
| Net financial position | 38.4 | 63.8 | -25.4 | 38.4 | 63.8 | -25.4 |
| Earnings per share, SEK | -0.04 | -0.62 | 0.58 | -1.83 | 2.22 | -4.05 |
| Average number of shares outstanding | 7,863,186 | 7,863,186 | 0.0% | 7,863,186 | 7,863,186 | 0.0% |
Comments by the CEO
GOOD ENDING TO A TRANSFORMATIVE YEAR
We conclude 2023 with strong resilience in our core markets and significant progress in our return to profitability. Net sales from our core business, excluding Nepa APAC, grew by 6.2 percent, or 3.8 percent in local currencies, driven by a recovery in ad hoc revenue from non-subscribing clients and growth in subscription revenue. Adjusted EBIT amounted to SEK 5.2 (0.7) million, concluding that we now are back in a profitable state.
Reported net sales in the quarter decreased by 2.2 percent, but the negative figure is a result of revenue reversals attributable to the correction of historical accounting errors in Nepa APAC. Subscription revenue grew by 6.5 percent, while ad hoc revenue from subscribers declined by 13.6 percent, mainly from lower activity from churned clients. On the positive, and as reported in the previous quarter, we saw an uptick in business with non-subscribers, resulting in a 10.0 percent increase in ad hoc revenue from non-subscribers. Such projects are generally a strategic sell to enhance our long-term relationships.
During the year, we have aligned our sales focus towards adding new subscribers and increasing the scope of many of the trackers, partly with new add-on modules launched during the year. While we have successfully added a set of such new clients and scopes, our efforts did not offset the lower retention levels during the fall. The churn in the quarter rose to 6.1 percent from the average quarterly churn of approximately 1 percent. In total, ARR decreased to SEK 164.0 (170.9) million. Industry-wide budget constraints among our clients, coupled with our internal focus on restoring profitability, have impacted our ability to retain clients effectively in the quarter. We recognize the importance of swiftly addressing these challenges and are committed to implementing measures to improve client satisfaction, enhance the value of our offerings, and strengthen our relationships.
In response to the challenging market conditions we faced in the beginning of the year, we implemented decisive measures to adapt and restructure our business. Throughout the whole year, we initiated and completed comprehensive cost reductions, which involved reducing our headcount, optimizing our processes, and centre our focus to core markets. While these decisions are never easy, they were necessary to streamline our organization and position ourselves for future profitable growth. Our cost position has been drastically improved, and we enter 2024 with a significantly lower and more structured cost base. Due to the successful implementation of internal efficiency enhancements, we have achieved the restoration of project margins to more satisfactory levels.
In the quarter, we demonstrated substantial improvements to our cost control and the implemented efficiency improvements have started yielding results. Excluding items affecting comparability of SEK 5.9 (4.5) million, attributable to restructuring costs from our cost reduction plan and the correction of accounting errors in Nepa APAC, adjusted EBIT amounted to SEK 5.2 (0.7) million.
PRODUCT FOCUS
In 2023, we focused more than ever on market-driven product development. We successfully launched CampaignPulse, a more automated and faster campaign test solution. We also launched AI Trend Boost, a revolutionary Brand tracking add-on to boost sample sizes and increase data accuracy. Our long-term product strategy aims at integrating our core product suite and adding more value-adding capabilities to drive new sales and increase retention with higher customer satisfaction and profitability.
FOCUS FORWARD
In 2024, our primary objective is to strengthen our sales and marketing endeavors. We will achieve this by further rebuilding our sales team and expanding our presence in larger research markets where we perceive significant potential for expanding our client base. With established tools and processes, we are committed to maintaining satisfactory project profitability across all aspects, from pricing strategies to timely delivery.
I am confident that the groundwork we have laid in 2023 will pave the way for a stronger, more resilient future for Nepa.
Ferry Wolswinkel
Interim CEO and CRO