YEAR-END REPORT Image Systems AB (publ)
|Fourth quarter October–December||January–December 2022|
|Oct-Dec 2022||Oct-Dec 2021||Full year 2022||Full year 2021|
|Order intake, MSEK||41.8||51.7||189.0||182.8|
|Order backlog, MSEK||81.9||72.0||81.9||72.0|
|Net sales, MSEK||55.9||44.2||180.2||158.7|
|Gross margin, %||66||70||69||68|
|EBIDTA margin, %||17||17||16||12|
|Operating profit (EBIT), MSEK||4.6||2.9||9.1||0.8|
|Profit/loss for the period, MSEK||4.5||2.6||8.6||0.1|
|Cash flow from operating activities, MSEK||13.0||7.6||26.7||15.7|
|Average number of employees||69||81||72||82|
|Earnings per share||0.05||0.03||0.10||0.00|
A WORD FROM THE CEO
The fourth quarter is a strong conclusion to a year most clearly defined by improvements, increased profitability and investment to facilitate growth. Net sales increased by 26 percent while the EBITDA margin was maintained at 17 percent. This marks the eighth consecutive quarter of improving margins and growth in rolling twelve months.
2022 forms the basis of sustained growth
During 2022, the Group implemented fundamental changes in terms of its product range, organization and business models. All this was achieved while reporting sales growth and margin improvements. Net sales increased by over 13 percent, and EBITDA strengthened by four percentage points to 16 percent. We can clearly see the result of the great commitment to customer value and focus on efficiency that pervades the entire Group.
The cash flow generated by the Group during the year will be utilized for continued investments in product development, efficiencies, growth and margin improvements.
The industry’s growing need to streamline
Extensive changes were implemented in the RemaSawco business unit during the year, with the aim of refining and streamlining the product range and enhancing the level of customer service. The outcome has not been long in coming. Net sales for 2022 increased by 9 percent, and at the same time, the EBITDA margin strengthened by 1.4 percentage points. RemaSawco, which now has a relevant and efficient product portfolio, will continue its journey of change—now focusing on assisting customers in maintaining a cost-efficient production. We see a growing need of access to accurate measurement data to be able to make the right decisions, and we are helping our customers digitalize and optimize their businesses.
Following an extended period of flying high, the sawmill industry is experiencing a slowdown in demand. This raises some concern in the shorter term. Thanks to our product portfolio refinement, we consider that we are entering 2023 with good prospects for RemaSawco. By strengthening our efforts relating to support services, we are aiming to increase customer satisfaction and ensure a smoother revenue flow over time. We see a continued high interest in our upgrade services.
The Motion Analysis business unit demonstrated a sales increase of approximately 37 percent for the full year 2022. It is also gratifying to note the fourth quarter's high order intake. Sales have increased in line with the reopening of the market after long lockdowns, enabling us, once again, to conduct customer visits. Our customers operate in the defense industry as well as in other industries with high standards of accuracy. Throughout this year, we have witnessed an overall growth in demand for the customer values provided by our solutions, and our assessment is that there is good growth potential still in our segment of the market.
Motion Analysis recognizes a margin improvement of slightly more than 10 percentage points for the full year. The gross margin is at levels above 90 percent.
As a leading supplier in niche markets, Motion Analysis sees good opportunities for further growth and is stepping up the pace of planned product development. At the same time, there is an aspiration to increase the proportion of subscription-based revenue.
Entering a new year full of ambition
I am proud of what we have delivered in 2022, which has provided a strong platform for our continued journey of growth. The organization is well adapted to both market conditions and trends, and I remain confident in our strategy and our objective to establish a center of excellence in non-contact measuring technology.
After a year of great change, we continue to develop our product range. At the same time, we focus on developing our business model to increase the share of recurring revenue, so that we can deliver on our financial objectives also in the long term.
Johan Friberg, CEO and President
THE GROUP'S DEVELOPMENT IN THE FOURTH QUARTER
Order intake, net sales and profit
Order intake amounted to MSEK 41.8 (51.7). Order backlog as of December 31, 2022, amounted to MSEK 81.9 (72.0).
Net sales amounted to MSEK 55.9 (44.2), of which MSEK 1.9 (1.6) related to capitalized development expenses across both business units.
Gross margin amounted to 66 (70) percent.
EBITDA amounted to MSEK 9.3 (7.5). Other external charges increased compared with the corresponding period last year, which mainly is attributable to costs relating to the ongoing organizational changes in RemaSawco and increased consultancy costs. Travel costs increased during the quarter compared with previous years.
Depreciation/amortization amounted to MSEK -4.7 (-4.6). Net financial items amounted to MSEK -0.3 (-0.5).
Result after taxes amounted to MSEK 4.5 (2.6).
Financial position, investments and cash flow
The Group’s investments in non-current assets during the quarter amounted to MSEK 2.4 (1.9) of which MSEK 1.9 (1.6) is related to capitalized development projects. Capitalization of development projects takes place in both business units.
The operational cash flow during the quarter amounted to MSEK 10.6 (5.7). Solidity amounted to 63 (58) percent as of December 31, 2022. Net indebtedness amounted to 0.0 (0.2) times.
Available liquid funds including undrawn overdraft facilities amounted to MSEK 38.2 (22.6) as of December 31, 2022.
THE GROUP’S DEVELOPMENT DURING THE FULL YEAR
Order intake amounted to MSEK 189.0 (182.8). Order backlog as of December 31, 2022, amounted to MSEK 81.9 (72.0).
Net sales amounted to MSEK 180.2 (158.7), of which MSEK 9.1 (6.5) related to capitalized development expenses. Net sales were positively influenced by customer-related exchange rate differences of approximately KSEK 800.
Capitalization of development projects takes place in both business units.
Gross margin amounted to 69 (68) percent.
EBITDA amounted to MSEK 28.4 (19.4). In the previous year, the operating profit was burdened by a one-off item of MSEK 1.4 for pension costs in RemaSawco. Depreciation/amortization amounted to MSEK -19.3 (-18.6). Net financial items amounted to MSEK -1.1 (-1.3).
Result after taxes amounted to MSEK 8.6 (0.1).
The Group's performance, rolling 12 months
The Group has seen a positive trend in performance for several quarters, which is a clear indication of the strength of our strategy and strengthens our determination to continue our efforts in the same direction. We can now see that we exceeded our long-term objective, to reach an EBITDA of 15 percent, for the year 2022 as a whole. To achieve the long-term objective, this level must persist over time. The Board of Directors has initiated a review of the financial objectives of the Group.
RemaSawco supplies measurement and optimization systems for the sawmill industry. The product range, based on proprietary measuring products and software, addresses everything from timber intake, sorting, sawmill lines and board handling to modern automation solutions.
Development in the fourth quarter
RemaSawco reports a quarter in line with our expectations, and we have completed several deliveries during the quarter. Despite the massive recast of the company during the year, order intake remains on par with the previous year and the profit has improved. The fourth quarter's result is slightly lower than the previous year, but for the year as a whole, both net sales and EBITDA show a year-on-year improvement. During the quarter, RemaSawco's marketing efforts were focused on upgrading programs relating to older products.
The demand for sawn wood has dropped as a result of the weak development in the construction industry. Many sawmills have implemented production stoppages to keep the stocks of wood products on appropriate levels. Our assessment is that demand will remain hesitant for a while but gradually recover. We note that large parts of our customer base are involved in upgrades of older products, concentrating on expanded and improved service concepts.
RemaSawco has now implemented the organizational change that was decided on and disclosed during the first quarter. Focusing on profitable products and enhancing the level of customer service remain essential cornerstones of RemaSawco's strategy, with improved net sales and EBITDA as the result. The aim is to create scalability and develop key capabilities for the digitalization and optimization of sawmills and related processes.
|MSEK||Oct-Dec 2022||Oct-Dec 2021||Full year 2022||Full year 2021|
|Order intake, MSEK||27.9||43.5||151.8||155.6|
|Net sales, MSEK||44.9||38.7||141.9||130.3|
|EBITDA margin, %||14.9||20.9||12.5||11.1|
RemaSawco is continously engaged in modernizing the product portfolio. Gradually, older products are phased out in favour of novel, innovative products and product improvements. During the period, the development effort was focused on three key areas: harmonization of functionality, user interfaces, and product upgrades. In addition, RemaSawco has developed improvements in the service offering that will be quoted to customers in 2023.
During the quarter, the company launched three major upgrades relating to the products Boardscanner-Q, RS-Opt and the new measuring frame RS-LogScanner 3D.
Motion Analysis Systems offers its customers software for the analysis of high-speed film, a niche where the company is the world leader. The software is sold under the product names TEMA and TrackEye. TEMA customers are predominantly found in the civil sector and TrackEye customers in defence-related testing and the aerospace industry.
Development in the fourth quarter
Motion Analysis comes in with a strong quarter, growing sales considerably over the previous year. The company has now made up for the loss of sales caused by the COVID-19 pandemic and the impact of reduced travelling. Motion Analysis shows a growth rate in sales volume of 37 percent for the year as a whole. At the same time, the margin improves by over ten percentage points to an EBITDA level of just below 40 percent. A significant proportion of the order intake during the quarter stems from the Asian market. For the year as a whole, the order intake is evenly distributed between Asia, Europe and America.
|MSEK||Oct-Dec 2022||Oct-Dec 2021||Full year 2022||Full year 2021|
|Order intake, MSEK||13.9||8.2||37.2||27.2|
|Net sales, MSEK||11.0||5.5||38.3||28.4|
|EBITDA margin, %||36.4||5.5||39.7||29.2|
This year's main release of TEMA came in December. The new functions introduce automation and result in a major simplification of the workflows of our customers. The development of our new software platform is ongoing, and the first DIC application is about to enter the verification phase. During the quarter, the company started work on the development of a cloud solution to facilitate sales, licensing and delivery.
The Parent Company
The Parent Company’s net sales for the fourth quarter amounted to MSEK 1.0 (0.8). Operating profit amounted to MSEK -1.4
(-1.0). Result after taxes amounted to MSEK 19.1 (6.8). Investments in fixed assets amounted to MSEK 0.0 (0.0). The Parent Company’s available liquid funds amounted to MSEK 0.3 (0.2) as of December 31, 2022. The Parent Company’s equity amounted to MSEK 105.6 (139.6) as of December 31, 2022, and solidity amounted to 98 (94) percent.
Significant events after the period
Emilien Saindon was appointed as deputy CEO for the Image Systems group.
The average number of employees was 72 (82). The number of employees at the end of the period was 69.
Number of shares
The number of shares on December 31, 2022, amounted to 89,207,818.
Annual General Meeting
The Annual General Meeting will be held on May 4, 2023, at 14:00, at the Company’s premises at Snickaregatan 40 in Linköping, Sweden. The annual report for 2022 will be published in Week 15 and will then be available on the Company's website.
Image Systems applies the International Financial Reporting Standards (IFRS) as adopted by the EU. The interim report for the Image Systems Group is prepared in accordance with IAS 34, Interim Financial Reporting, and the Swedish Annual Accounts Act. Disclosure in accordance with IAS 34, Interim Financial Reporting, is provided in notes as well as elsewhere in the interim report.
The interim report for the Parent Company, Image Systems AB, is prepared in accordance with the Swedish Annual Accounts Act as well as the Swedish Financial Reporting Board’s recommendations RFR 2 Accounting for Legal Entities.
Image Systems applies the ESMA (European Securities and Markets Authority) Guidelines on Alternative Performance Measures. Definitions of indicators are provided on page 14 and relevant reconciliations on page 13.
Risks and uncertainties
The Group’s significant risks and uncertainties include business risks related to agreements with customers and suppliers as well as other external factors such as currency fluctuations. The Group’s significant financial and business-related risks are discussed at depth in the management report and under Note 3 in the 2021 Annual Report. No significant new or changed risks or uncertainties have been identified during the quarter.
This year-end report has not been reviewed by the Company’s auditors.
Annual report 2022 available Week 15, 2023
on the company's website
Interim Report January–March 2023 May 4, 2023
Annual General Meeting 2023 May 4, 2023
Interim Report April–June 2023 23 August, 2023
Interim report July-September 2023 November 10, 2023
Year-end report 2023 February 9, 2024
Long-term financial objectives
Image Systems aims to create long-term increase in value for its shareholders. To achieve this, the Board of Directors has set long-term financial objectives:
Dividend 20% of the profit after taxes
Linköping, February 10, 2023
The Board of Directors
This disclosure contains information that Image Systems AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 10-02-2023 08:00 CET.
Links and Media
Latest Press releases
Image Systems affärsområde RemaSawco erhåller beställning från Vida på drygt 4,1 MSEK
Image Systems' business area RemaSawco receives an order from Vida for just over SEK 4.1 million
Fortsatt effektivisering ger resultat
Continued streamlining yields results