Improved profitability – solution launch and market expansion: Interim report, January – March 2023
Financial development, Q1 2023:
- Net sales amounted to MSEK 89.9 (76.0), rendering a profitable net sales growth of 18% (110%)
- The FX adjusted net sales growth for the first quarter amounted to 13% (97%)
- Software revenue amounted to MSEK 55.8 (47.2). The share of total sales reached 62% (62%)
- The quarter was impacted by items affecting comparability amounting to MSEK 0.0 (5.2) (attributable to IPO)
- Adjusted EBIT amounted to MSEK 11.3 (8.3)
- Adjusted EBIT margin amounted to 13% (11%)
- Operating cash flow amounted to MSEK -8.3 (1.4).
- Net income amounted to MSEK 7.6 (2.8)
- Earnings per share amounted to SEK 0.22 (0.09) and diluted to SEK 0.21 (0.08)
A word from the CEO:
I am pleased with the solid start to the year as we continue to execute on investments as part of our expansion plan whilst delivering continued growth with improved profitability. In the turbulent world we find ourselves in, we delivered a growth of 18%, with an FX-effect of 6%. At the same time, we managed to increase our profitability during the first quarter with a margin of 13% (11%). During the next quarter, we will establish our non-defence business in North America and launch our new climate resilience solution.
Turbulent times - improved profitable growth
Although the world faces challenges from ongoing conflicts, supply chain disruptions, and geopolitical tensions, we remain vigilant and closely monitor these developments and adapt quickly to both challenges and opportunities. Even though current world events mean our offering is becoming more relevant than ever across different sectors and markets, these challenges can also lead to extended procurement processes or delayed purchasing decisions. This may increase the risk of quarterly volatility in the short term.
In addition to improved profitability during the quarter, we can also report a solid growth on an RTM-basis with net sales of MSEK 345.1, a growth of 15% with an FX effect of 8%. Profitability on an RTM-basis amounted to MSEK 46.9 in adjusted EBIT, rendering a margin of 14%.
Growing number of customers in multiple sectors
During the first quarter, we have on-boarded several new customers to the Exonaut platform and extended and prolonged multiple customer contracts. For example, in the Nordics, we have closed an agreement with a life science company to help them build resilience against different threats using our Exonaut platform. In North America, we reached an important milestone with a US military delivery and now progress towards deployment in the second half of 2023. In the International segment, we have signed an agreement with a large client in the financial sector to support them within operational resilience. For these clients as for many more in highly regulated industries, mission critical operations and armed forces, it is becoming evident that a solution like Exonaut is instrumental to ensure the protection of critical infrastructures, operational resilience and efficient training management.
Launch of a Climate Resilience solution
Our investment in Exonaut Next Generation over past couple of years now starts to pay off – not just as futureproof and truly scalable platform, but also as it enables us to innovate and meet customer requirements much faster than in the past. You saw this first-hand previous year when we launched our solution for individual training - MyExonaut, to both existing and new customers, based on the next generation Exonaut Training Management Platform.
In the next quarter we will launch our brand-new climate resilience solution. The solution is based on our Exonaut Resilience platform. With a growing interest and demand in the market for ESG and climate solutions, we see great potential for a comprehensive solution to manage all aspects of climate resilience. Not only will this solution greatly add value to new and existing customers, but it will also make an important contribution to mitigate climate change.
Future roadmap for Exonaut Military Training Solutions
As we continue to successfully roll out the next generation of our Exonaut Training Management platform and solutions to defence clients we will invest time and effort during the next quarter to detail the platform and solutions roadmap for the future. We will explore emerging customer requirements based on lessons learned from operations as well as envisaged changes in training schemes and foreseen procurements. We will explore how new advances in technology, such as the latest developments in artificial intelligence (AI) can be integrated into our solutions to deliver increased value to our clients. All these initiatives are in line with our growth plans to make sure we stay at the forefront of innovation in military training management.
Establishing a non-defence business in North America
We are pleased to report that our new geographical markets, such as APAC, where we established local presence last year, are developing according to plan - with a promising pipeline of new software deals. Now we are taking the next step. In 2016, we successfully established our local presence in North America with a focus on training solutions for defence customers. With a growing interest from the North American market for our resilience offering, we will in the next quarter establish a local business unit to address the public and corporate sector requirements with our Exonaut Resilience solutions.
All activities and investments in new markets and new offerings are crucial to support our customers and to achieve further growth– and in doing so we are creating a safer society. With more local sales and tech resources, we lay a good foundation for creating the organization and environment for further profitable growth and for reaching our financial targets in the mid-term perspective.
Working towards a safer society
Finally, the first quarter of 2023 has been good for 4C Strategies in many ways. We continued to increase our presence in all markets by attending different exhibitions to present and demonstrate our solutions. We have delivered improved profitability, grown significantly and on-boarded both new colleagues and customers.
As 4C Strategies continues to grow its international presence we are committed to contributing to a safer society and helping to make the world a better place for the future.
Invitation to webinar for the presentation of 4C Strategies’ interim report, Q1 2023:
4C Strategies' interim report for Q1 2023 will be published on Friday, May 12, 2023, at 07:50 CET.
The same day at 09:30 CET, a presentation will be held where analysts, investors, media and other stakeholders are invited to participate. The presentation will be a webinar where 4C Strategies’ Magnus Bergqvist (CEO) and Anders Nordgren (CFO) will comment on the published report and answer questions. The presentation will be in English.
Afterwards, the presentation material will be available on 4C Strategies’ website under 'Reports and Presentations'.
For participation at the presentation:
Sign up here
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