Presentation: Q3 2021 Results
Watch the live presentation with CEO, Peter Lauring, in this blog.
Q&A from the presentation
M&A activity in other markets: It has primarily been in Norway so far. Will we see more in other markets soon, for example Sweden?
We are working in all four Nordic markets as well as in the UK market on an ongoing basis. Therefore, there will be acquisitions outside of Norway going forward. However, this is a process depending on the parties in terms of when they are ready to meet and conclude a deal.
Acquisitions always come in portions and not smoothly, one at a time. That is the nature of it.
How has customer churn developed so far in 2021 with respect of/to F&A and IT?
Customer churn is not at zero, but it is reasonable. However, we are feeling the affect from COVID-19 more than from customer churn. Regardless, we have initiated a project to create a culture where the customer awareness is much higher than it is as of today.
This is very much an issue in the accounting division where the tradition of the industry is different compared to the culture of the IT industry. We are aware of the differences across divisions as well as the differences across countries, and we are working on it.
What organic growth level do you view as reasonable for F&A and IT respectively in 2022?
We should on a broad basis achieve our overall goal of 5,5%.
Pre restructurings or reorganizations when doing mergers - and merge of a company, forming a company of 300 million NOK revenue - takes a week or two behind the scenes and affects the focus of growth as well.
Once it is done however, focus will return in the right areas. On one hand, we are building the business and must accept that it affects our specific customer focus while on the other hand, we are creating the conditions enabling us to focus more directly on building the business.
For 2022 we therefore expect a growth level of 5,5%.
Should we expect M&A efforts to increase in Q4 versus Q3?
Having the M&A efforts increase in Q4 versus Q3 would be the normal development. However, we are constantly in dialogue with 15 subjects, and we never know for sure when we will conclude a deal. Looking at Q4 2021 and Q1 2022 as one, we are expecting a lot to happen within M&A.
When is it expected to reach an average 70% ownership of subsidiaries?
During 2022. We are continuing the process in Q4 2021, but we will approximately reach the goal around the summer or autumn of 2022 within a margin of one percentage.
Could you explain the Q3 2021 revenues isolated versus the Q2 2021 revenues isolated?
When we look at the Q3 2021 revenues isolated versus the Q2 2021 revenues isolated there is growth. This has to do with seasonality. In the accounting side, the growth in Q3 would normally be lower and the revenue would be lower than the two previous quarters. In the IT side, it is difficult to predict the revenue development.
We have NOK 411m in Q3 2020, NOK 557m in Q3 2021, NOK 624m in Q2 2021, and if you look at the Q2 2020 it is also higher than Q3 2020. There is no significant deviation in the seasonality between Q2 2020, Q3 2020, Q2 2021, and Q3 2021. It is the normal seasonality we are seeing. However, the base is that the accounting revenue in Q3 is always lower because it has its peak in Q2 and the summer is affecting Q3 in both divisions.
When we look at Q3 compared to Q2, it is affected by the summer and the fact that the accounting side has its peak revenue in Q2. This explains the deviation from Q2 to Q3.
Have you seen any indications of cost inflation within salary, software license etc.?
We have not seen indications of cost inflation within salary, software licenses etc. We expect to see indications within the next couple of months. We will take these indications into account when we look at our yearly price regulation. But as of now, we have not seen any serious signals yet.
If your questions were not answered
Any questions not answered in the above may be addressed to Chief Operating Officer Christine Lundberg Larsen, email@example.com, +47 452 11 552