• Net sales increased by 16.1%, or 17.3% FX adjusted, to MSEK 78.7 (67.8)
• Gross profit increased by 25.4%, or 26.9% FX adjusted, to MSEK 63.1 (50.3)
• EBIT increased to MSEK 10.7 (5.4)
• Earnings after tax was MSEK 10.5 (4.3)
• Earnings per share was, basic SEK 1.33 (0.55), diluted SEK 1.33 (0.55)

• Net sales increased by 14.2%, or 15.2% FX adjusted, to MSEK 295.5 (258.8)
• Gross profit increased by 21.6%, or 22.9% FX adjusted, to MSEK 231.3 (190.2)
• EBIT increased to MSEK 40.0 (15.6)
• Earnings after tax was MSEK 38.6 (13.1)
• Earnings per share was, basic SEK 4.91 (1.67), diluted SEK 4.91 (1.67)
• The Board propose that a dividend of 1.23 SEK per share shall be paid out

IMPORTANT EVENTS

• Nepa repaid the remaining 8.5 MSEK of the loan from the Swedish Tax Agency, after taking advantage of the opportunity to defer payment of social security contributions, VAT and other taxes. Therefore, the total loan is now fully repaid.

• With the outbreak of the war in Ukraine the uncertainty has increased significantly in the beginning of 2022. Nepa supports employees who in any way are affected by the war. For Nepa, the monetary effects of the war have so far been limited to a few customer assignments in Russia and Ukraine.

A WORD FROM OUR CEO

There was a continued strong market during the final quarter of the year, which is reflected in the result. Sales rose by just over 16 percent to SEK 78.7 million (67.8). At the same time, gross profit strengthened by just over 25 percent to SEK 63.1 million (50.3), the highest ever in the company's history. The gross margin increased by 6 percentage points to 80.2 percent (74.2). Operating profit (EBIT) amounted to SEK 10.7 million (5.4). The EBIT margin in relation to gross profit rose to 17.0 percent (10.7) while profit after tax amounted to SEK 10.5 million (4.3).

During the quarter, we welcomed more colleagues to handle the increased business volume, especially as many new customer projects usually start up before the end of the year. At the same time, it was important to work with our internal legacy clean-up projects of systems and processes which, due to large incoming ad hoc customer projects during 2021, were behind schedule during the first two quarters 2021. During the first half of 2022, we will bring in extra resources for a temporary effort so that we finish our legacy clean-up according to plan in the summer of 2022. Then we enter an expansion phase as previously communicated.

The year of 2021 was a financially stable year where our gross margin for the full year increased to 78.3 percent, compared to 73.5 percent for 2020. With the fourth quarter, we had a good end to a good year. During the full year, the share of recurring revenue amounted to 63 percent, which is in line with the previous year. In nominal terms, however, recurring revenues increased by SEK 20.5 million to SEK 186.1 million (165.6).

I am also pleased to announce that the Board has proposed that Nepa for the first time as a listed company will pay out a dividend to the shareholders.

Transition and growth initiatives

Through our ongoing legacy clean-up, we improve the conditions for profitable growth long-term. The main objective of this initiative is to improve productivity in both our advisory and platform parts.

We will also continue to develop our offering within tech augmented advisory, where the expertise and experience of our experts and advisors are integrated with self-developed technical delivery methods. The majority of Nepa's clients see a great value in the combination of data delivery and insight advisory, only a few clients buy just the data to make their own interpretation. The reason is that it is complex to interpret the meaning of the data, and to draw the right conclusions. Nepa has for 15 years analyzed these types of continuously collected data flows. We have streamlined methods to interpret the meaning of these data flows, and are skilled at refining them into concrete, actionable insights.

Our internal measures aim, among other things, to get the right data even more efficiently in a timely manner out to Nepa's experts, advisors, and customers for further analysis. Ultimately, this helps to further strengthen Nepa's competitiveness and maintain our already low customer churn rate.

Outlook

Rising inflation, runaway energy prices and the outbreak of war in Ukraine are contributing to a significant increase in uncertainty at the beginning of 2022. It is yet too soon to comment on what the consequences may be. Regarding the war in Ukraine, it is hard not to think of all those affected by this senseless aggression. For Nepa, the monetary effects of the war have so far been limited to a few customer assignments in Russia and Ukraine, where the discontinued business corresponds to less than 0.5 percent of sales on an annual basis.
 

Over the past two years, in parallel with having to fend off the effects of the Corona pandemic, we have managed to turn Nepa's earnings trend into profitable growth. I think this proves that we know how to handle crises while at the same time being able to grow profitably. This makes me, despite a challenging environment, confident that Nepa will have opportunities to continue to strengthen its position long term.

Ulrich Boyer

CEO
 

For further information, please contact:

Ulrich Boyer, CEO                                Michael Wallin, Head of Investor Relations
+46 708 226 618                                  +46 708 788 019
ub@nepa.com                                     michael.wallin@nepa.com
 

This is a translation of the Swedish interim report. If there should be any discrepancies, the Swedish language version governs. The Swedish version is information that Nepa AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08:00 CET on March 18, 2022.