KISTA, Sweden, April 24, 2019 First quarter 2019
- Revenue in the first quarter was SEK
240.9 (170.3) million, equivalent to a 41 percent
increase.
- Operating profit excluding non-recurring items for the first
quarter increased to SEK 65.7 (35.1)
million, corresponding to an operating margin excluding
non-recurring items of 27.3 (20.6) percent.
- Operating profit for the first quarter increased to
SEK 62.2 (27.0) million, equivalent
to an operating margin of 25.8 (15.9) percent.
- Earnings per share increased to SEK
2.14 (0.94) for the first quarter.
- Cash flow from operating activities was SEK 93.3 (8.0) million for the quarter.
- Cash and cash equivalents and financial investments amounted to
SEK 142.7 (140.6) million at the end
of the quarter.
- During the quarter, Enea came to a settlement agreement with
the large customer regarding historic royalty payments which
generated SEK 20 million in
revenue.
- Enea Software AB acquired a business unit from Atos Convergence
Creators in the quarter through an asset acquisition. This business
unit was consolidated into Enea effective 1 March, with operations
then integrated into the Network Solutions product group.
- On 8 January, Enea announced the appointment of Jan Häglund as
its new CEO. Jan will take up his position at Enea's AGM on
6 May 2019.
January - March 2019
(First quarter previous year in brackets)
- Revenue, SEK 240.9 (170.3)
million
- Revenue growth, 41 (19) %
- Revenue growth, currency adjusted, 34 (21) %
- Operating profit excluding non-recurring items, SEK 65.7 (35.1) million
- Operating profit, SEK 62.2 (27.0)
million
- Operating margin excluding non-recurring items, 27.3 (20.6)
%
- Operating margin, 25.8 (15.9) %
- Net profit after tax, SEK 41.4
(18.2) million
- Earnings per share, SEK 2.14
(0.94)
- Cash flow (from operating activities), SEK 93.3 (8.0) million
- Cash and cash equivalents and financial investments,
SEK 142.7 (140.6) million
Anders Lidbeck, President and CEO
comments:
New year, new records
The first quarter was a strong start to 2019. Revenue was up by
as much as 41 percent on the first quarter 2018, with operating
profit up by a fantastic 130 percent on the first quarter one year
previously. Operating profit before non-recurring items increased
by all of 87 percent year over year. To bring some perspective to
these numbers, it's worth remembering that when we presented our
operating profit before non-recurring items a year ago, this was
the best first-quarter operating profit in Enea's history.
Earnings per share set another new record for a first quarter, and
we were able to report EPS of over SEK
2 for the second consecutive quarter. But we should note
that in the quarter, we reached a settlement that provided us with
SEK 20 m of revenue. We were in a
long-term dispute with one of our major customers on historical
royalty payments. As previously reported, most of this dispute was
settled by in an arbitration procedure in January 2018. The arbitration agreement concluded
all outstanding issues in this protracted dispute. This enables us
to look forward, and focus on rebuilding trust and endeavoring to
create new partnerships in attractive segments with this
customer.
In the first quarter, we were also able to complete the
acquisition of a business unit from Atos Convergence Creators, as
we announced late last year. This operation was integrated as a new
business unit in the quarter, focusing on policy management,
authentication and access management within Enea's organization,
and we've added new sales and development offices in Austria, Germany and Croatia. This new acquisition offers Enea new
potential to address fourth and fifth-generation mobile core
networks. These operations were consolidated into Enea's accounts
effective March of the past quarter, and are already making a
positive contribution to our EPS.
Our global software business grew very robustly overall in the
first quarter of the year, increasing by 75 percent year over year.
Sales in the segment we designate Network Solutions, which will
also include the recently acquired operation, grew by a total of 95
percent overall on the corresponding quarter of the previous year.
Our Operating System Solutions business also grew by 15 percent on
the corresponding quarter of the previous year. In this latter
case, growth was driven by the above conciliation settlement. It
bears repeating that we should be aware that our traditional
business on Key Accounts is contracting with more widespread use of
open source. This underlying trend is unchanged.
The first quarter of the year is usually eventful, and the past
quarter was no exception. The Mobile World Congress was held in
Barcelona at the end of February,
and as usual, was the largest convention for the whole industry we
operate in. As previously, Enea was an exhibitor, with a larger
stand and greater presence than ever before. This year, we were
able to present the 'new' Enea including Openwave Mobility, and our
recently acquired business unit in policy and access management
also participated under Enea's banner and branding. We also started
the year by announcing some of the largest single deals we have
made for some time, including major new deals in traffic management
and the DPI segment. We also received several new awards in this
latter segment, with our new Qosmos Probe product winning the gold
medal in ISPG's Excellence Awards, and Cyber Defense magazine's
InfoSec Awards, as winner of the Most Innovative Product in the
cyber forensics category, as well as winner of Most Cutting Edge
Product in the threat hunting category. We are continuing our work
on developing our positioning in cyber security, and in the past
quarter, also participated as an exhibitor at RSA—the largest
conference and trade fair in the security segment.
New times and a new Enea
The Enea that's now taking shape is a completely different
company to the Enea I took over as CEO of in 2011. Over the past
eight years, we have evolved from being a player in services and
embedded operating systems with a major regional focus on the
Nordics, to becoming a global player in software for
telecommunication and software components for cyber security.
We've created unprecedented profitability within the company and
embarked on a journey of growth that has taken us from the stock
market's Small Cap to Mid Cap list, to now converging on yearly
revenue of SEK 1 billion. I now see a
company with every prospect of continuing to develop its market
positioning and set new records in terms of revenue, profitability
and cash flow. Obviously, our 600-plus professionals worldwide, who
work every day to build a bigger, stronger and more successful
Enea, are the foundation of this fantastic progress. It's been a
privilege to serve as CEO of these outstanding people, and I offer
you my humble thanks for your trust in me. When I depart as CEO in
a few weeks' time, I do so with the confident conviction that Enea
has a bright future ahead, with Jan Häglund as its new CEO, leading
Enea to new successes.
Future prospects
It's also worth repeating that while shareholders should be
pleased about another very strong quarter, we also need to be aware
that our business does vary between quarters, that these variations
increase with the acquisitions we have executed in recent years.
Acquisitions that strengthen our market position and long-term
earnings capacity are an important part of our strategy. It is also
this strategy that enables us, despite decreasing revenues from Key
Accounts, to maintain our ambition to keep growing the company with
good profitability and healthy cash flows.
Our objective for the full year 2019 is to achieve revenue
growth over 2018 and an operating margin exceeding 20
percent.
Press and analyst meeting
Press and financial analysts are invited to a press and analyst
meeting where Anders Lidbeck,
President and CEO, will present and comment on the report.
Time: Wednesday April 24 at
08:30 am CET.
Link: https://financialhearings.com/event/11500
Phone number: SE: +46-850558355, UK: +44-3333009262
The full report is published on www.enea.com
This information is information that Enea AB (publ) is
obliged to make public pursuant to the EU Market Abuse Regulation.
The information was submitted for publication, through the
agency
of the contact person set below, on April 24, 2019 at 7.20 CET.
About Enea
Enea develops the software foundation for the connected society.
We provide solutions for mobile traffic optimization, subscriber
data management, network virtualization, traffic classification,
embedded operating systems, and professional services. Solution
vendors, systems integrators, and service providers use Enea to
create new world-leading networking products and services. More
than 3 billion people around the globe already rely on Enea
technologies in their daily lives. Enea is listed on Nasdaq
Stockholm. For more information: www.enea.com
Enea®, Enea OSE®, Netbricks®, Polyhedra®, Zealcore®, Enea®
Element, Enea® Optima, Enea® LINX, Enea® Accelerator, Enea® dSPEED
Platform and COSNOS® are registered trademarks of Enea AB and its
subsidiaries. Enea OSE®ck, Enea OSE® Epsilon, Enea® Optima Log
Analyzer, Enea® Black Box Recorder, Polyhedra® Lite, Enea® System
Manager, Enea® ElementCenter NMS, Enea® On-device Management and
Embedded for LeadersTM are unregistered trademarks of Enea AB or
its subsidiaries. Any other company, product or service names
mentioned above are the registered or unregistered trademarks of
their respective owner. © Enea AB 2019
For more information visit
www.enea.com/investors or contact:
Anders Lidbeck
President & CEO
E-mail: anders.lidbeck@enea.com
Renee Johnson
Executive Assistant
Phone: +46-70-971-01-78
E-mail: renee.johnson@enea.com
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SOURCE Enea AB