Enea Interim Report January-June 2021
Enea strengthens cybersecurity offering
April – June 2021
- Net sales amounted to SEK 225.8 million (239.0), equivalent to a 5 percent decrease. Net sales increased by 1 percent in fixed currency rates.
- Operating profit amounted to SEK 62.1 million (59.1), corresponding to an operating margin of 27.5 percent (24.7). Operating profit excluding non-recurring items amounted to SEK 62.1 million (60.4), equivalent to an operating margin of 27.5 percent (25.3).
- Net profit after tax amounted to SEK 52.0 million (46.8).
- Earnings per share amounted to SEK 2.41 (2.18).
- The Annual General meeting appointed Jan Frykhammar as a new Board member. The board was given a mandate to issue shares to finance continued growth.
January – June 2021
- Net sales amounted to SEK 439.9 million (460.7), equivalent to a 5 percent decrease. Net sales increased by 3 percent in fixed currency rates.
- Operating profit amounted to SEK 106.8 million (81.7), corresponding to an operating margin of 24.3 percent (17.7). Operating profit excluding non-recurring items amounted to SEK 106.8 million (100.9), equivalent to an operating margin of 27.5 percent (21.9).
- Net profit after tax amounted to SEK 95.5 million (63.8).
- Earnings per share amounted to SEK 4.43 (2.98).
Significant events after period-end
- On July 15th Enea announced the acquisition of AdaptiveMobile Security. The acquired company is market leading in technology for the protection of signaling and messaging in mobile networks. AdaptiveMobile Security is acquired at an enterprise value of EUR 45 million.
Statement by the President and Chief Executive Officer
Solid quarterly financials
Net sales for the second quarter of 2021 were SEK 225.8 million, which is a 1 percent increase on the corresponding period a year previously, currency adjusted. Operating profit was SEK 62.1 million, equivalent to an operating margin of 27.5 percent. Cash flow before changes in working capital amounted to SEK 88.4 million, consolidating an already stable financial position. The net sales of our largest product group, Network Solutions, increased by 13 percent in fixed exchange rate terms. The Aptilo business unit, acquired in the fourth quarter of 2020, is the source of most of the sales increase. The Operating Systems product group was down by 30 percent, which is as expected and the result of customers increasingly adopting platforms based on open source. In the Software Development Services product group, we’re experiencing good demand for our expertise in embedded systems from customers in sectors including medical devices. Overall, net sales in this product group decreased by 21 percent due to continued low demand for consultants from aviation industry customers.
Enea acquires AdaptiveMobile Security
Our acquisition of AdaptiveMobile Security significantly strengthens our offering and customer base in cybersecurity for telecom. AdaptiveMobile Security is a world leader in technology to protect signaling and messaging in mobile networks. The company has over 80 customers worldwide, managing and protecting traffic for an estimated 2 billion-plus subscribers. Sales of advanced software products and associated services enable a high share of repeat revenues and long-term customer relationships. There are several key commonalities between AdaptiveMobile Security and Enea, including 5G and traffic intelligence; shared customer bases offer good potential for extra sales and a broader product portfolio. The acquisition will be integrated as a new business unit, conferring continuity and focus for staff and customers, while we progressively realize synergies in sales, technology, and administration. Financially, AdaptiveMobile Security is forecast to contribute revenues from the third quarter, and increased earnings per share from the fourth quarter 2021.
Continued investments in growth segments
Despite delays on the market over the past year and barriers to new sales, we’re continuing to invest in new products and business models. Our traffic intelligence and cybersecurity software has recently gained coveted awards. The revenue model for these businesses is based on our customers’ growth, generating potential for the future, but also making modest contributions for the short term. Our offering in 5G Core, focused on data management, is attracting great interest from customers and collaborative partners. While this market remains in an early phase, we’re already seeing how network operators want to use products from software specialists like Enea to create state-of-the-art and flexible 5G systems. As an example, we’ve contributed to one 5G project for Telenor, whose prototype for 5G recently secured the prestigious Innovation Award at the Global Mobile Awards 2021. Our positioning as a specialist in software built with open interfaces and optimized for the cloud brings real hope that we can grow market shares and revenue as demand increases over the coming years.
The market for data management in 5G, virtualization, and advanced cybersecurity is entering an exciting phase, where we can challenge established competitors and win market shares with innovative products and new business models. Our ambition is to increase revenue robustly through organic growth in Network Solutions plus complementary strategic acquisitions that advance our market positioning.
However, due to the continued impact of the corona pandemic, the short and medium-term uncertainties remain substantial. Its consequences have caused delays in customer projects, barriers to new business sales, and other negative effects on our businesses. This also creates risks for earnings through the third and fourth quarters. Despite these uncertainties, our target for 2021 is to create sales growth year over year, and an operating margin of over 20 percent.
The full Interim Report is attached to this press release and has been published on the Enea website (see references below).
Enea is pleased to invite investors, analysts, and media to a presentation of the Interim Report. The presentation will be conducted in English by Jan Häglund, President and Chief Executive Officer, and Björn Westberg, Chief Financial Officer, and will be concluded by a questions and answer session. It can be attended through a webcast or conference call and the presentation material as well as a recording of the presentation will be published on the Enea website (see details and references below).
- Date: July 16, 2021
- Time: 8.30 a.m. CEST
- Link for webcast: https://financialhearings.com/event/13202
- Phone numbers for conference call:
+46 8 5055 8373 (Sweden)
+44 33 3300 9030 (UK)
+1 631 913 1422 – PIN: 88557852# (US)
- Webpage for Enea financial reports
- Webpage for Enea financial presentations
Jan Häglund, President and Chief Executive Officer
E-mail: [email protected]
Lotta Trulsson, Executive Assistant
E-mail: [email protected]
Enea is one of the world’s leading specialists in software for telecommunications and cybersecurity. The company’s cloud-native products are used to enable services for mobile subscribers, enterprise customers, and the Internet of Things. More than 3 billion people rely on Enea technologies in their daily lives.
Enea is headquartered in Stockholm, Sweden, and is listed on Nasdaq Stockholm.
For more information: www.enea.com