vitec - vertical market software · vitec software group ab (publ) vitec short facts vitec short...

Vitec Software Group AB (publ)

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

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.



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


A selection of our customers

http://www.gravi.lt/saugykla/Video/seb.jpg

http://images.google.com/imgres?imgurl=http://www.skyltbolaget.com/websites/skyltbolagetcom/bildbank/Vasakronan logo.jpg&imgrefurl=http://www.skyltbolaget.com/site.aspx?id=537&usg=__h1-ycIGSjEJ79FFeyBppSgYY2WY=&h=190&w=850&sz=27&hl=en&start=1&um=1&tbnid=8Vh6A9o4rib-RM:&tbnh=32&tbnw=145&prev=/images?q=vasakronan&hl=en&sa=N&um=1

http://www.dombron.se/

http://www.litgrid.eu/go.php/eng/IMG/1

http://www.garanti.no/Default.aspx


Selection of customers – Property managers Selection of customers – Property managers

http://images.google.com/imgres?imgurl=http://www.skyltbolaget.com/websites/skyltbolagetcom/bildbank/Vasakronan logo.jpg&imgrefurl=http://www.skyltbolaget.com/site.aspx?id=537&usg=__h1-ycIGSjEJ79FFeyBppSgYY2WY=&h=190&w=850&sz=27&hl=en&start=1&um=1&tbnid=8Vh6A9o4rib-RM:&tbnh=32&tbnw=145&prev=/images?q=vasakronan&hl=en&sa=N&um=1

http://www.dombron.se/


Business Area Fastighet Business Area Fastighet

Rental

coupon

Tenant pages

Apartment rentals


Selection of customers - Mäklare Selection of customers - Mäklare

http://www.garanti.no/Default.aspx


Business Area Mäklare Business Area Mäklare

Data for www.hemnet.se

Purchase Agreement

Appl. on the brokers website


Selection of customers - Energi Selection of customers - Energi

http://www.litgrid.eu/go.php/eng/IMG/1


Business Area Energi Business Area Energi

Power load forecasts

Network calculations of electricity load

Windpower forecasts

District heat pipe flow

http://www.litgrid.eu/go.php/lit/I_pradzia


Selection of customers – Finans och Försäkring Selection of customers – Finans och Försäkring

http://www.gravi.lt/saugykla/Video/seb.jpg


Business Area Finans och Försäkring

Mortgage calculations

Pension Calculations


Selection of customers - Media Selection of customers - Media


Business Area Media Business Area Media

SMP – Social Media Platform


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


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)


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

)


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


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 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

(%

)


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 %


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)


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)


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)


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


Board 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

www.vitec.se


Lars Stenlund, VD

http://www.vitec.se/

vitec - vertical market software · vitec software group ab (publ) vitec short facts vitec short...

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