Visma (VISMA) Q3 2011 earnings summary

Executive summary

• Revenue reached NOK 1,171 million in Q3 2011, up 14.7% year-over-year, with strong top-line growth and significant acquisition activity, including the integration of Mamut ASA.

• EBITDA before one-off M&A expenses was NOK 246 million, up 7% year-over-year; reported EBITDA was NOK 228 million.

• Net income for the quarter was NOK 85 million, compared to NOK 108 million in Q3 2010.

• Operational cash flow increased to NOK 152 million from NOK 98 million in Q3 2010.

• SaaS revenue growth was strong, with SaaS revenue expected to exceed NOK 300 million for the full year.

Financial highlights

• Gross profit after COGS rose 20% year-over-year, driven by a favorable mix of own software and SaaS revenue.

• EBITDA margin before M&A expenses was 21%, while reported EBITDA margin was 19.5%, down from 22% in Q3 2010.

• Equity at quarter-end was NOK 1,212 million, with an equity ratio of 18.2%.

• Interest-bearing debt increased to NOK 3,431 million, mainly due to acquisitions and debt restructuring.

• Cash position at quarter-end was NOK 1,013 million.

Outlook and guidance

• Continued demand for productivity-enhancing ERP and cost-reducing outsourcing services is expected.

• SaaS revenue is projected to surpass NOK 300 million for 2011, with several new cloud products to be launched.

• Acquisition activity will slow as integration of recent acquisitions becomes the priority.

• No deep recession is expected in core markets, though some negative impact from Eurozone debt issues is noted.