COMMENTS TO THE OPERATION
Revenues
SuperOffice’s main business revenue is derived from the sales of software licenses and from software maintenance revenues. Furthermore, the positive development that was reported at end of Q2/07 has continued in Q3/07. The total revenue from sales of licences and maintenance in Q3/07 ended at MNOK 59,2 (MNOK 50,1), corresponding to an increase of 18,2%. By the end of Q3/07 the revenue from sales of licences and maintenance has, year to date, increased by 15,7%, from MNOK 155,6 to MNOK 180,0.
Revenue from Services increased by 20,6% from Q3/06, and ended in Q3/07 at MNOK 12,3 (MNOK 10,2). The increase is mainly contributed to an increased demand for our consultants. In addition, the consultancy departments have introduced an improved service offering for customers and partners. Year to date the revenue from services has increased by 6,4% from MNOK 36,0 to MNOK 38,3.
Operating expenses
Cost of goods sold increased due to several sales which involved third party products and were part of the total sales.
The increase in wages and social costs for Q3 isolated relates mainly to the number of employees that has increased following the acquisition of SuperOffice eJournal AS. The Financial statements for Q3/07 have also been affected by the severance costs for two of the managers in SuperOffice Norge AS. For the quarter isolated and year to date the costs for recruiting of new employees is considerably higher than in previous periods.
Other operating expenses have increased mainly due to the acquisition of SuperOffice eJournal AS, and a general increased activity level within the group.
The bad debt expenses are still on a very low level, and for the quarter isolated a negative expense has been recorded. Losses that have previously been provided for have now been paid.
Operating result
EBIT for the quarter ended at MNOK 17,0, an increase of 19,8% compared to the same quarter last year. The EBIT margin for the quarter is 23,6% (23,1%). Year to date the EBIT is MNOK 49,1 (39,4), and the EBIT margin is 21,9% (20,2%).
Cash Flow
The net positive cash flow from operations for Q3 is MNOK -22,1 compared to MNOK -10,1 in the same period in 2006. The variation from Q3/06 is due to increased maintenance revenues which have been paid in during the first quarter. The Company’s maintenance revenues are invoiced in January, and are mainly paid in during the first quarter. The revenues will be recognized relatively linear during the year. Following the current invoicing policies, the company’s cash flow is negatively affected for the remaining quarters of the year.
Year to date 2007, the cash flow from operations is MNOK 65,7 compared to MNOK 70,4 in the same period in 2006.
Balance sheet
SuperOffice has a solid financial position as basis for future growth. Please see below for comments to the main balance sheet items.
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The acquisition of SuperOffice eJournal AS is reflected in the balance sheet as from Q3/07. Rights are recorded at MNOK 11,2 and goodwill amounts to MNOK 23,8.
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Account receivables amount to MNOK 44,1 at the end of Q3/07, and is still on a low level compared to the turnover.
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The liquidity balance at end of Q3/07 is MNOK 55,2, and relates mainly to cash and bank deposits. As of Q3/07, the Company has no interest bearing debt.
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Other short term debt relates mainly to prepaid maintenance, VAT, tax and provision for commissions.
FUTURE EXPECTATIONS
There are no changes to SuperOffice’s strategy from what has been communicated earlier. External market analysts still expect the CRM market to grow, and based on the product portfolio, SuperOffice will continue to be a leading supplier of CRM solutions in Europe. With the acquisition of eJournal AS in Q2/07 SuperOffice demonstrated that the Company continues to evaluate acquisitions of CRM related software companies which are considered to contribute with added value, improved market position and profitable business opportunity to SuperOffice.
SuperOffice has a positive view on the coming quarters, but the quarterly development might vary depending on in which quarters major contracts are signed.
During the last 4 years, SuperOffice has shown a positive development in both revenue and profits. SuperOffice strives to continue this trend in 2007. As an international group with close to 70% of the turnover in foreign currencies, SuperOffice is exposed for risk related to fluctuations in exchange rates. The Norwegian krone (NOK) has strengthened throughout Q3, and a continued strong NOK will impact the figures for SuperOffice in Q4/07 compared to Q4/06
This quarterly financial statement is presented according to IAS 34 and the accounting principles described in the Annual Report for 2006.
The quarterly report for Q4/07 will be released February 15, 2008.
The Board of Directors of SuperOffice ASA
Oslo, October 11 2007
Financial statement Q3 2007
Presentation Q3 2007
Webcast Q3 2007