Prepress
Readsoft: Year-End Report 2013
Monday 17. February 2014 - Good finish to a challenging year
Sales for the fourth quarter decreased with 5 percent to SEK 230.1 (243.2) million
License revenue for the fourth quarter decreased with 2 percent to SEK 91.4 (92.9) million
Operating profit EBITDA for the fourth quarter was SEK 34.1 (45.4) million
Earnings per share after tax for the fourth quarter were SEK 0.61 (1.17)
Sales for January-December decreased with 3 percent to SEK 761.3 (781.7) million
License revenue for January- December decreased with 2 percent to SEK 243.6 (248.3) million
Operating profit EBITDA for January-December was SEK 19.9 (63.0) million
Earnings per share after tax for January- December were SEK 0.11 (1.57)
Cash-flow from operating activities for January- December was SEK 73.3 (74.8) million
The Board of Directors will propose to the Annual General Meeting an unchanged dividend of SEK 0.60 per share for 2013
CEO comment:
Good finish to a challenging year
“In the fourth quarter we delivered an acceptable EBITDA margin of 15 percent, despite the fact that during this quarter we have taken non-recurring costs in conjunction with a re-organization. The global roll-out of XBOUND during 2013 took longer than expected and consequently we didn’t reach our full sales potential for this area. The decrease in hardware sales in the fourth quarter and for the full year 2013 is primarily related to XBOUND. We also had a tough start to 2013 with a decrease in billable consulting hours, which had a negative impact on our result. We solved this problem quickly and the number of billable consulting hours for the remainder of the year has been good. Additionally our results were affected by non-recurring costs associated with our acquisition of Expert Systems as well as costs related to the cost reduction program that we initiated during the second quarter. Although our 2013 results are not where we ought to be, we believe the investments we made and actions we took in acquisitions, employees, products and organization are essential to our long-term growth, results and margins.
In local currencies our total sales decreased 4 percent for the fourth quarter and were flat for the full year 2013. Given the challenges we faced in 2013, the fourth quarter is a step in the right direction. Our license sales, adjusted for currency effects, grew 1 percent during the fourth quarter as well as for 2013. It is very gratifying to see that all the hard work on increasing our recurring revenues is continuing to pay off. The recurring revenues have increased by approximately six percentage points for the fourth quarter, as well as for 2013, and this will have a very positive impact on ReadSoft’s future profitability. Our cash flow from operating activities remains strong.
The financial possibilities offered from the cost reduction program have already been partially invested in the areas we had previously announced, and we did this as quickly as possible to get the full effect of our investments. In the beginning of 2013 we reorganized the sales organization for our Oracle solutions, creating a dedicated team working exclusively with Oracle sales on a global basis. This change has proven to be very positive and our license sales for Oracle have more than doubled. As a result of this success, we have decided to create a similar sales organization for XBOUND with a focus on improving sales of XBOUND in 2014. We will also, during 2014, intensify the roll-out of our acquired e-invoicing solution on a global basis, which will give our subsidiaries good upselling opportunities that also are recurring revenue based.
ReadSoft closed several large deals during the fourth quarter, including one with a global manufacturer that invested SEK 9.3 million in ReadSoft’s SAP-certified business process automation solution. This customer will handle over one million invoices distributed both on paper and electronically. During the fourth quarter our markets in North America, Asia and South Africa have shown the way with good growth and profitability. On the product and partner side of the business we had a busy quarter with expanded investments, accreditations and partnerships with among others IBM and Microsoft. We have also taken some exciting steps with our leading cloud solutions where we launched new functionality and a new set of mobile applications for the mobile operating systems iOS, BlackBerry, Android and Windows 8.
Our goal is to continue to grow profitably. With a market-leading position and several good opportunities to further develop the company, ReadSoft stands well equipped for the future.”