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MarketScreener Homepage  >  Equities  >  NASDAQ OMX ICELAND  >  Origo hf.    ORIGO   IS0000000396

ORIGO HF.

(ORIGO)
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End-of-day quote. End-of-day quote NASDAQ OMX ICELAND - 01/15
40.2 ISK   -0.25%
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2020ORIGO : Investor presentation
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Origo : Investor presentation

11/03/2020 | 08:45am EST

INTERIM RESULTS - 9M 2020

PRESENTATION 22 OCTOBER 2020

JÓN BJÖRNSSON, CEO

GUNNAR PETERSEN, CFO

SCHEDULE

RESULTS

OPERATIONAL HIGHLIGHTS

FINANCES

OUTLOOK

Origo F3 & 9M

16% REVENUE GROWTH IN FIRST 9M

  • Results in Q3 above expectations in terms of sales and profits
  • Revenues up in all segments
  • Transformation of operations in end-user equipment and related services, increased demand for managed services and good quarter at Applicon are the key reasons for the improved performance
  • Origo's software division has successfully adapted its operations to the new circumstances created by Covid-19

2020

%

2020

%

Q3

9M

Revenue

ISK

15.0%

ISK

15.7%

3,983m

YOY

12,156m

YOY

Gross profit

ISK

25.1% of

ISK

24.5% of

1,000m

revenue

2,984m

revenue

Net profit

ISK

ISK 461m

90m

EBITDA

ISK

8.5% of

ISK 698m

5.7% of

338m

revenue

revenue

  • One of the best quarters in Origo's history

OPERATIONAL HIGHLIGHTS

HIGHLIGHTS

End-User Equipment and Related

Operational service and

Software and Related Services

Services

Infrastructure

Revenue of ISK 4.6bn and EBITDA of ISK 236m in the first 9 months

  • Conditions have been favourable lately
  • Keys to good result:
    • Strategic adjustments
    • Increased emphasis on online store
    • Expertise in audio and visual solutions
    • Investment in Tölvutek

HIGHLIGHTS

End-User Equipment and Related

Operational service and

Software and Related Services

Service

Infrastructure

Revenue of ISK 3.8bn and EBITDA of ISK 146m in the first 9 months

  • Decent results - emphasis on improving efficiency through increased automation and standardisation
  • Continued increase in customers in outsourcing and cloud subscription services
  • Significant demand for Origo's expertise in security solutions
    • Origo's knowledge and experience in security solutions has been noted in the Nordic countries
    • One of our goals is to market and sell our security solutions abroad
  • Origo benefits from increasing construction of data centres in Iceland

HIGHLIGHTS

End-User Equipment and Related

Operational service and

Software and Related Services

Service

Infrastructure

Revenue of ISK 3.7bn and EBITDA of ISK 316m in the first 9 months

  • Origo's software division has successfully adapted its operations to the changed circumstances
  • Origo's strong position has allowed it to deliver solutions for sampling and improving the public's ability to communicate with healthcare services
    • The Icelandic healthcare system has been able to conduct up to 5 thousand COVID-19 tests per day
  • The hotel solution The Booking Factory has doubled the number of its customers and more than half of the revenue is generated from abroad
  • Origo intends to continue investing in travel-related solutions

HIGHLIGHTS

End-User Equipment and Related

Operational service and

Software and Related Services

Service

Infrastructure

  • Landshypotek Bank in Sweden confirmed the purchase of SAP S/4HANA enterprise software
  • Work underway on innovations for Landshypotek's online banking solution
  • SAP deposit system launched at SBAB Bank in Sweden, covering more than 400,000 deposit accounts
    • Implementation carried out mostly remotely
  • Contract signed for continued implementation of SAP (SAP system for consumer mortgages)
  • Landshypotek and SBAB have become large users of Applicon's managed services and opportunities exist to further expand these partnerships

HIGHLIGHTS

TEMPO

Revenue up 17.4% and EBITDA of USD 5,4 m for 9M which is on budget

  • Good revenue growth during the year, particularly in subscription revenue which had 38% growth YTD
  • Costs down at the same time
  • Sales were flat at the beginning of year but are now picking up
  • All emphasis on Tempo's cloud solution
  • EBITDA 23.5% of revenue
  • Work underway on the "globalisation" of products by adding 5 languages (French, Russian, German, Spanish and Portuguese)

INCOME STATEMENT AND BALANCE SHEET

GUNNAR PETERSEN

CFO

INCOME STATEMENT Q3 2020

REVENUES UP IN ALL SEGMENTS AND IMPROVED PROFITABILITY

  • 15% revenue growth
    • Revenue of ISK 4bn
    • Revenues up in all segments
  • Profit margin of 25.1% - versus 21.6% last year
    • Gross profit of ISK 1,000m versus ISK 747m in Q3 2019
  • Operating costs of ISK 857m
    • 21.5% of revenue, as compared to 18.7% in the prior year period
    • Operating costs as a percentage of revenue and in ISK have been trending down over recent quarters
  • EBITDA of ISK 338m
    • EBITDA is 8.5% versus 7.3% last year
    • EBITDA in End-User Equipment and Operation and Infrastructure up significantly from last year
    • EBITDA in software down when compared to Q3 2019
    • Large investment in own software

Revenue*

4.500

4.336

4.277

4.102

3.983

4.000

3.897

3.500

3.553

3.493

3.463

15,0%

3.323

3.320

3.239

3.167

2.996

3.000

0

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q3

2017

2017

2018

2018

2018

2018

2019

2019

2019

2019

2020

2020

2020

EBITDA*

350

EBITDA

One-time costs

338

302

300

280

274

+33,4%

254

253

250

237

37

197

213

200

175

130

150

115

131

237

100

50

123

25

0

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

2017

2017

2018

2018

2018

2018

2019

2019

2019

2019

2020

2020

2020

*Adjusted for one-time costs

* Revenue and EBITDA does not include Tempo ehf which was part of the group until November 2018

INCOME STATEMENT Q3 2020

ISK 90M PROFIT IN THE PERIOD

  • Net financial expenses of ISK 51m
    • Net financial expenses were positive by ISK 3m in the prior year period
    • ISK 25m exchange rate loss in the quarter
  • Translation difference in respect of subsidiaries and associates was negligible in Q3 2020, versus a negative figure of ISK 59m in the prior year period
    • Largely attributable to the interest in Tempo
  • Net profit of ISK 90m in the period

INCOME STATEMENT 9M 2020

EBITDA UP EXLUDING ONE-TIME COSTS

  • 15.7% revenue growth
    • Revenue of ISK 12bn
    • Revenues up in all segments
  • Profit margin of 24.5% versus 24.0% last year
  • Operating costs 23.2% of revenue as compared to 21.4% last year
    • 9M operating costs higher due to one-time costs
  • *EBITDA of ISK 865m, up 22.9% YOY
    • ISK 130m one-time salary costs in Q2
    • ISK 37m write-down of receivables in Q1
    • EBITDA including one-time costs of ISK 698m

12.500

Revenue**

12.156

12.000

11.500

15,7%

11.000

10.500

10.509

10.000

9.774

9.723

9.500

500

0

9M 2017

9M 2018

9M 2019

9M 2020

EBITDA One-time costs

EBITDA*

900

865

800

167

+22,9%

704

700

600

500

455

400

362

698

300

200

100

0

9M 2017

9M 2018

9M 2019

9M 2020

*Adjusted for one-time costs

** Revenue and EBITDA does not include Tempo ehf which was part of the group until November 2018

INCOME STATEMENT 9M 2020

EXCHANGE RATE MOVEMENTS HAVE LARGE IMPACT ON NET INCOME IN FIRST NINE MONTHS

  • Net financial expenses of ISK 177m
    • ISK 106m exchange rate loss, versus ISK 29m in 2019
    • Financial income down by ISK 59m
  • Translation difference in respect of subsidiaries and associates was ISK 411m
    • Largely attributable to the interest in Tempo
  • The above items will fluctuate in opposite directions in line with movements in the ISK

*Adjusted for one-time costs

BALANCE SHEET

STRONG BALANCE SHEET

In ISK million

30.09.2020

31.12.2019

Tangible assets

2,072

2,029

Fixed assets up by ISK 619m from year-end 2019

Intangible assets

2,983

2,845

Income tax asset

32

18

− Interest in associate up in ISK

Interest in associate

3,124

2,684

Securities and other long-term claims

146

161

− Intangible assets up by ISK 138m

Non-currrent assets

8,357

7,738

Inventory

1,371

1,321

Trade and other receivables down by ISK 182m from

Trade and other receivables

1,818

2,000

year-end

Cash

591

826

Current assets

3,779

4,147

Cash on hand at the end of the quarter was ISK 591m

Total assets

12,137

11,885

Equity

7,066

6,817

Strong balance sheet to support further growth and

Interest-bearinglong-term liabilities

603

579

investment

Lease liabilities

1,379

1,392

Long-term liabilities

1,982

1,972

Payments due next year on lease liabilities

322

310

Interest-bearingshort-term liabilities

63

61

Trade and other payables

2,704

2,725

Short-term liabilities

3,089

3,095

Total equity and liabilities

12,137

11,885

STRONG BALANCE SHEET

MAIN RATIOS IN LINE WITH TARGETS

Net debt/EBITDA

Net debt/EBITDA Target

Equity Ratio

70%

66%

62%

62%

60%

59%

58%

57%

56%

60%

50%

44%

45%

42%

42%

40%

40%

40%

40%

30%

20%

10%

0%

2017-12017-22017-32017-42018-12018-22018-32018-42019-12019-22019-32019-42020-12020-22020-3

In ISK million

30.09.2020

31.12.2019

Fixed assets

8,357

7,738

Current assets

3,779

4,147

Total assets

12,137

11,885

Equity

7,066

6,817

Long-term liabilities

1,982

1,972

Short-term liabilities

3,089

3,095

Total equity and liabilities

12,137

11,885

*EBITDA adjusted for IFRS impact

CASH FLOW 9M 2020

  • Liabilities accrued in Q4 2018 were paid down in Q1 2019

which explains why cash from operations was negative in Q1 2019

  • EBITDA of ISK 698m and adjusted EBITDA of ISK 876m
  • Changes in operating assets and liabilities positive by ISK 88m
  • Cash from operations of ISK 713m after first nine months of 2020

Cash from operations (ISK)

1.176

631

441

377

334

294

183

18

42

-161

-777

Q1 2018

Q2 2018

Q3 2018

Q4 2018

Q1 2019

Q2 2019

Q3 2019

Q4 2019

Q1 2020

Q2 2020

Q3 2020

108

209

713

698

72

14

420

33

180

48

285

-252

EBITDA

Inventory

Decrease in

Decrease

Net interest

Cash from

Investing

Share

Dividend

Payments on Lease liabilities

Decrease

increase

receivables

in payables

operations

activities

repurchases

long-term debt

in cash

OUTLOOK

OUTLOOK

  • Considerable opportunities to better serve customers and further strengthen the operations and every reason to pursue them
  • Favourable environment for end-user equipment both in the enterprise and consumer markets as well as service solutions for enterprises
  • Conditions for large implementation projects for enterprises more uncertain
  • We will further strengthen our software teams
    • Development of own software products
    • Strengthening of digital transformation projects

QUESTIONS?

DISCLAIMER

Forward-looking statements contained in this presentation may be based on management's current estimates and expectations, and not on facts that may be verified after its publication. Such statements are inherently uncertain.

We therefore caution the reader that there are a variety of factors that could cause business conditions and results to differ materially from what is contained in our forward-looking statements, and that we do not undertake to update any forward-looking statements.

These forward-looking statements speak only as of the date of this presentation and are qualified in their entirety by this cautionary statement.

Disclaimer

Origo hf. published this content on 03 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 November 2020 13:44:03 UTC


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Financials
Sales 2019 14 845 M 115 M 115 M
Net income 2019 685 M 5,29 M 5,29 M
Net Debt 2019 1 517 M 11,7 M 11,7 M
P/E ratio 2019 17,4x
Yield 2019 -
Capitalization 17 481 M 136 M 135 M
EV / Sales 2018 0,60x
EV / Sales 2019 0,92x
Nbr of Employees 493
Free-Float 72,3%
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Income Statement Evolution
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NameTitle
Ívar Kristjánsson Chairman
Linda Björk Waage Managing Director-Operation & Infrastructure
Gunnar Már Petersen Chief Financial Officer
Guðmundur Jóhann Jónsson Vice Chairman
Hildur Dungal Director
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