Year-end report, January – December 2021

OCTOBER – DECEMBER

• Net sales amounted to MSEK 26,7 (22,1), rendering a sales growth of 21%. The organic net sales growth was 21%
• The quarter was impacted by one-off items affecting comparison amounting to MSEK 5,5 attributable to the company's listing on the Nasdaq First North Growth Market, adjusted figures exclude this item
• Adjusted EBITDA amounted to MSEK 7,5 (6,6), rendering an EBITDA-margin of 28% (30)
• EBITDA amounted to MSEK 2,0 (6,6), rendering an EBITDA-margin of 7% (30)
• EBITA amounted to MSEK 0,6 (5,4) rendering an EBITA-margin of 2% (24)
• EBIT amounted to MSEK -1,3 (3,8) rendering an EBIT-margin of neg % (17)
• Profit after tax amounted to MSEK -1,1 (2,9). Earnings per share before and after dilution amounted to SEK -0,07 (0,19).
• Cash flow from operating activities before changes in working capital amounted to MSEK 1,1 (7,2)
• The value of contracted annualised recurring revenues with deduction for terminated contracts, CARR, at the end of the period was MSEK 78,8 rendering an increase of 28% the last 12 months

JANUARY – DECEMBER

• Net sales amounted to MSEK 96,3 (81,3), rendering a sales growth of 18%. The organic net sales growth was 18%
• The year was impacted by one-off items affecting comparison amounting to MSEK 5,5 attributable to the company’s listing on the Nasdaq First North Growth Market, adjusted figures exclude this item
• Adjusted EBITDA amounted to MSEK 31,8 (27,1) rendering an EBITDA-margin of 33% (33)
• EBITDA amounted to MSEK 26,3 (27,1) rendering an EBITDA-margin of 27% (33)
• EBITA amounted to MSEK 20,8 (22,2) rendering an EBITA-margin of 22% (27)
• EBIT amounted to MSEK 13,8 (16,3) rendering an EBIT-margin of 14% (20)
• Profit after tax amounted to MSEK 10,6 (12,1). Earnings per share before and after dilution amounted to SEK 0,69 (0,81).
• Cash flow from operating activities before changes in working capital amounted to MSEK 23,0 (24,8)

CEO comment

On December 8, 2021, Momentum Software Group AB was listed on Nasdaq First North Growth Market. We are happy to see the great interest we have been met with, both during and after the listing process. I would like to welcome all new shareholders on an ambitious journey ahead.

Order intake
The value of our contracted annual recurring revenue, CARR, amounted to MSEK 78,8 as per December 31, 2021, corresponding to a growth of 28 percent over the last twelve months. The order intake during the quarter amounted to a net of MSEK 5,0 as compared to MSEK 3,1 the same period 2020. It was mainly driven by two larger new customers, several upgrades and the yearly indexation.

Reported recurring revenue during the last twelve months amounted to MSEK 59,3 and the value of recurring revenue yet to be implemented amounted to MSEK 15,7. The latter amount is the highest yet and the effect of a 2021 where the order intake was higher than our capacity to implement.

Implementation capacity
Based on the high order intake during the spring of 2021, we saw a need to strengthen our service organisation with 16 new consultants and project leaders. We are delighted to see the energy with which these new recruits have come into the organisation and how quickly they have embraced and further boosted our culture.

The investment in new personnel has negative short-term effects on profitability, mainly affecting Q3 and Q4 2021, but enables a higher implementation rate for the products new and existing customers have already contracted.

Revenue and profitability
Revenue growth, all organic, amounted to 21 percent during the fourth quarter and 18 percent for the full year. The higher growth rate of the fourth quarter was mainly attributable to our strengthened service organisation that has resulted in both increased services revenue and a higher rate of implementation for products already contracted.

Adjusted EBITDA in the fourth quarter 2021 amounted to MSEK 7,5 compared to MSEK 6,6 in the corresponding period 2020. Adjusted EBITDA for the full year 2021 amounted to MSEK 31,8 with a margin of 33 percent. Despite increased investments in new hires and planned lower service revenue in certain areas, the EBITDA margin was on the same level as 2020.

In December 2019, Momentum decided to phase out the business area Boplats. The decision was a part of our strategy revision to only develop scalable standard software. The last Boplats customer was decommissioned in December 2021. As a result of the phase out, annual recurring revenue decreases by MSEK 2,2 from 2022. Meanwhile, we free up resources for our remaining platforms.
The phasing out of older platforms Is a prerequisite for fully taking advantage of the scalability in our business model. The discontinuation of Boplats is one part of this process but there is still more work to do amongst our other legacy products. This is of high priority and will enable positive margin effects during coming years.

Products
We continued to rapidly advance our product development in the fourth quarter. An interface change was implemented in our Energy platform that simplifies navigation for daily users. Interest in our automated imports also continued to soar amongst customers. Automation is an important concept in all our platforms, and we see great potential for our customers to utilise these possibilities.

During the quarter, our first Property customers also went live in the new Leasing platform that was launched in September 2021. Going forward, our focus in product development is to expand and refine our new add-on products “My Pages” and “Leasing” as well as to continually strengthen our parts of the Property platform.

We also pre-launched our new concept for digital signatures, Momentum Signering. The solution simplifies customers’ internal processes and lowers costs.

2022
Our goals for the new year are clear. We will continue the roll-out of our updated platforms and new add-on products to support our customers in their challenge to streamline processes and provide a better tenant experience. Our ambitions also include the development of our internal processes with the target of becoming an industry leader within customer support and satisfaction.

We are actively working on carrying out selective acquisitions. We have several ongoing dialogues and are continuously evaluating new opportunities that could strengthen our value proposition within software for property owners.

I look forward to an exciting year together with our employees, customers and owners.

Richard Durlow, CEO