Revenue grew 16.3% to MNOK 75,7 (MNOK 65,0) and operating income (EBIT) grew at 36.8% to MNOK 15,5 (MNOK 11,4) The EBIT margin for Q2/07 is 20,5% (17,5%). Results before taxes was 55.7% better than the same time last year, MNOK 17,2 (MNOK 11,0).
Year to date the turnover is MNOK 151,8 compared to MNOK 133,9 in the same period last year. Reported EBIT increased 27,2% to date, MNOK 32,0 compared to MNOK 25,2 in the same period last year. The net cash flow from operations year to date amounts to MNOK 87,9 (MNOK 80,7).
Q2 2007 was a very good quarter for SuperOffice. It is especially exciting to report that the Germany subsidiary has grown 48,4% by consistently winning new contracts quarter after quarter.
At the end of June, SuperOffice entered into an agreement to acquire eJournal AS, a Norwegian software company which develops and delivers customer service and support applications. After having completed the due diligence the acquisition is now completed, and the shares were transferred to SuperOffice ASA on July 11, 2007. The company’s name is now SuperOffice eJournal AS. The acquisition of eJournal is part of SuperOffice’s acquisition strategy, and is financed by MNOK 31,8 in cash and MNOK 4,8 in SuperOffice shares. The transaction is not reflected in the results and balance sheet at the end of Q2/07. The eJournal AIM server application will become a natural and integrated part of the SuperOffice CRM portfolio. Before the acquisition of eJournal, the SuperOffice solution included functionalities within office automation, marketing and sales. Following the acquisition, the SuperOffice is now able to offer a professional, flexible and scalable solution which includes customer support and service. SuperOffice will continue to invest in the development of the eJournal solution portfolio which is already seamlessly integrated with the SuperOffice CRM solution.
COMMENTS TO THE OPERATION
REVENUES
SuperOffice’s main business revenue is derived from the sales of software licenses and from software maintenance revenues. The positive development from Q1/07 has continued into Q2/07. The total revenue from sales of licences and maintenance increased 18,1% at MNOK 60,7 (MNOK 51,4). Year to date, the revenue from sales of licences and maintenance increased by 14,6%, from MNOK 105,5 to MNOK 120,9.
The revenues from Services and third party sales increased by 8,4% from Q2/06, and ended at MNOK 15,1 (MNOK 13,6). The increase is mainly contributed to an increased demand for our consultants.
OPERATING EXPENSES
Cost of goods sold increased due to several sales which involved third party products and were part of the total sales. Other operating expenses increased following a general increased activity level within the group, and several ongoing internal development projects which involved external consultants.
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 been provided for in Q1/07 have been paid in Q2/07.
OPERATING RESULT
EBIT for the quarter increased 38,8% and ended at MNOK 15,5. The EBIT margin for the quarter is 20,5% (17,5%). Year to date the EBIT is MNOK 32,0 (25,1), and the EBIT margin is 21,1% (18,8%).
CASH FLOW
The net cash flow from operations for Q2 is MNOK -24,5 compared to MNOK -14,6 in the same period in 2006. The variation from Q2/06 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 the remaining quarters of the year. For the first half year 2007, the cash flow from operations is MNOK 87,8 (MNOK 80,6).
BALANCE SHEET
The financial position of SuperOffice is still very strong.
Account receivables amount to MNOK 47,7 at the end of Q2/07. Compared to the turnover the accounts receivable are somewhat lower than at the end of Q2/06, and the risk related to the outstanding receivables are considered to be low.
During Q2/07, SuperOffice sold the shares in the Austrian company update software AG. The accounting profit from the sale of the shares is recorded as part of the financial income.
The liquidity balance at end of Q2/07 is MNOK 108,7, and relates mainly to cash and bank deposits. As of Q2/07, the Company has no interest bearing debt. During Q2/07, SuperOffice completed the implementation of a common bank solution within the group that has improved the return on cash deposits.
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 at the end of June 2007, SuperOffice demonstrates 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.
As previously discussed, in Q2/ 2007 the Company released a CRM solution for SAP Business One, SAP’s ERP system targeted towards the SMB market. The future plans are for SuperOffice to cooperate with SAP Business One to launch the solution globally through the SAP’s Business One sales channels. Principally, this comprises markets where SuperOffice has their own subsidiaries, as well as the United States. There is significant potential in the cooperation with SAP, and it is an important business area for SuperOffice in the future.
As previously discussed, the establishment of an extended partner channel is an important part of the company’s strategy in 2007 and the years to come. The strategy relates to all markets, and the strategy has to date contributed positively.
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 and beyond. As an international group with more than 70% of the turnover in foreign currencies, SuperOffice is exposed for risk related to fluctuations in exchange rates. The Norwegian krone (NOK) has strengthened towards the end of Q2, and a continued strong NOK might influence the results of SuperOffice.
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 Q3/07 will be released October 12, 2007.
The Board of Directors of SuperOffice ASA
Oslo, July 12 2007