Q2 2020 Interim Report
Contents | ||
17-August-2020 | © Zalaris ASA | www.zalaris.com |
About Zalaris
We simplify HR and payroll administration and empower organizations with useful information so that they can invest more in their people.
Our proven local and multi-country solutions for payroll and HR includes software and business process as a service (SaaS/BPaaS), and outsourcing (BPO). Our solutions integrate with customers global HR systems. Mobile apps enable people to work from anywhere. We can implement with remote project teams, addressing needs in times of Covid-19 pandemic. #teamZalaris has 800 competent team members across Europe and APAC serving customers from local language service centers. Our 300+ consultants have more than 20 years of experience across all industries and IT environments including on premise, cloud and integration services. Zalaris manage solutions serving over 1.5 million employees each month, across multiple industries and with many of Europe's most reputable employers.
Headquartered in Oslo, Norway, Zalaris is publicly traded on the Oslo Stock Exchange (ZAL).
2 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Q2 Highlights
- Revenue of NOK 198.4 million (NOK 187.5 million) +5.8%
- Adjusted EBIT of NOK 12.7 million (NOK 7.4 million) +71.6%
- Cash and cash equivalents of NOK 129.0 million, +NOK 41.5 million (+47.4%) from previous quarter and +NOK 69.4 million from last year (+116.4%)
- Proactively and successfully servicing our customers in a challenging Covid-19 environment, the vast majority of team members worked from home. Signed several new agreements and expansions
- Covid-19resulted in a slow-down in closing new contracts during the quarter. However, the pipeline remains strong, and is expected to grow due to an increased focus on outsourcing and digitalization
- Cost reduction initiatives carried out is having a positive effect on EBIT margins, and has strengthened cash generation. We continue to target 10% EBIT margin
- Based on the current financial performance of the Company the Board will propose a dividend of minimum NOK 0.5 per share for 2020
Revenue (NOKm) | Adjusted EBIT* (NOKm) | |||||||||||
206,2 | 14 | 13,4 | 12,7 | |||||||||
200,6 | ||||||||||||
198,4 | ||||||||||||
12 | ||||||||||||
187,5 | 190,7 | |||||||||||
10 | 8,9 | |||||||||||
8 | 7,4 | |||||||||||
6 | 5,0 | |||||||||||
4 | ||||||||||||
2 | ||||||||||||
0 | ||||||||||||
Q2 2019 | Q3 2019 | Q4 20198 | Q1 2020 | Q2 2020 | Q2 2019 | Q3 2019 | Q4Q420192018 | Q1 2020 | Q2 2020 | |||
*Defined in separate section: Alternative Performance Measure (APMs)
3 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Key Figures
Q2 2020 financial summary
(NOK 1 000) | |||
Revenue | |||
Growth (YoY) | |||
EBITDA | |||
1) | |||
Adjusted EBITDA | |||
Adjusted EBITDA margin (as % of revenue) | |||
EBIT | |||
1) | |||
Adjusted EBIT | |||
Adjusted EBIT margin (as % of revenue) | |||
Profit/(loss) for the period | |||
Earnings per share (EPS) | |||
Total comprehensive income | |||
Free cash flow | 1) | ||
Net interest-bearing debt (NIBD) | 1) | ||
Full time equivalents (FTEs) period end | 1) | ||
- Defined in separate section Alternative Performance Measure (APMs)
2020 | 2019 | 2020 | 2019 | 2019 |
Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec |
198 445 | 187 548 | 399 056 | 379 899 | 776 792 |
5,8 % | -0,7 % | 5,0 % | 1,3 % | 4,2 % |
29 318 | 26 352 | 60 171 | 54 171 | 103 381 |
26 866 | 21 388 | 53 690 | 43 953 | 87 549 |
13,5 % | 11,4 % | 13,5 % | 11,6 % | 11,3 % |
7 367 | 4 412 | 16 818 | 10 895 | 14 091 |
12 690 | 7 377 | 26 081 | 16 429 | 30 240 |
6,4 % | 3,9 % | 6,5 % | 4,3 % | 3,9 % |
22 420 | (3 324) | (26 132) | 2 940 | (7 011) |
1,14 | (0,17) | (1,33) | 0,15 | (0,36) |
(156) | (3 351) | 3 700 | (4 468) | (5 323) |
41 805 | (2 140) | 55 031 | (28 414) | 17 046 |
(277 939) | (308 723) | (277 939) | (308 723) | (286 610) |
723 | 825 | 723 | 825 | 753 |
Q2 2020 financial performance by business segment*
2020 | 2019 | 2020 | 2019 | 2019 | |
(NOK 1 000) | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec |
Revenue | |||||
Managed services | 137 109 | 133 869 | 279 457 | 270 110 | 553 691 |
Professional services | 61 336 | 53 678 | 119 599 | 109 789 | 223 101 |
Group overhead and other | - | - | - | - | - |
Total revenue | 198 445 | 187 548 | 399 056 | 379 899 | 776 792 |
EBIT | |||||
Managed services | 16 005 | 15 770 | 32 742 | 29 412 | 54 957 |
Professional services | 4 054 | 3 507 | 10 333 | 12 186 | 20 961 |
Group overhead and other | (12 692) | (14 865) | (26 256) | (30 704) | (61 828) |
EBIT | 7 367 | 4 412 | 16 818 | 10 894 | 14 090 |
EBIT margin (%) | |||||
Managed services | 11,7 % | 11,8 % | 11,7 % | 10,9 % | 9,9 % |
Professional services | 6,6 % | 6,5 % | 8,6 % | 11,1 % | 9,4 % |
Group overhead and other | n/a | n/a | n/a | n/a | n/a |
EBIT margin (%) | 3,7 % | 2,4 % | 4,2 % | 2,9 % | 1,8 % |
*Revenue from certain consulting services previously report as part of Managed Services have been moved to Professional Services from 1 January 2020. Business development costs previously included within Group Overhead has been allocated to the business segments from 1 January 2020. Comparable historical information has been updated accordingly.
4 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
CEO Insights
Continuing Positive Development in Margins and Cash
In a macro environment heavily impacted by the Covid-19 pandemic, we are pleased to announce that we, with almost all of #teamZalaris working from home, delivered Q2 with a Y-o-Y revenue growth of 5.8% to NOK 198.4 million and corresponding adjusted EBIT growth of 79% to NOK
12.7 million. At the same time, we saw our cash position increase with NOK 65 million compared with Q2 2019.
All our services have been delivered without disruption. A handful of our colleagues been infected with Covid-19 whilst working from home. They are now safe and back at work.
Our early offering of Covid-19 related services supporting our customers tackling the pandemic, were well received.
Our modern IT solutions and distributed service center infrastructure enabled us to move to home office within a few days. Our supportive team of colleagues did whatever needed to support customers in this difficult time.
Feedback from customers and employees on how we have handled the situation has resulted in all time high Net Promoter Scores.
Maintaining revenue with Zero Churn despite Covid-19.
Many of our customers are adjusting headcount and business volumes downward as a result of Covid-
19. However, we have maintained overall revenue development through supporting customers with additional services resulting from the pandemic.
A functioning payroll and HR function is a "license to play" for all large companies. Our customer base is solid with typical five-year agreements. We have had no churn or Covid-19 related write-offs.
Working from anywhere has become the new normal driving the need for fully digitised people processes. This is the core of what we have been delivering for twenty years.
In Managed Services, we experienced increased interest resulting in a growing pipeline. During the quarter we signed several new agreements including: a five year agreement for SaaS based payroll with the Norwegian County Municipality of
Trøndelag with 5000+ employees, a ten year master services agreement for payroll and HR services to leading Nordic bank with 15'000+ employees, and a five-year agreement for SaaS based payroll with a 3000+ employee strong leading global energy company operating in Norway. We expanded our services with GlaxoSmithKline to cover Austria.
Resulting from Covid-19 we see companies scrambling to reduce and make costs variable. Based on our experience from previous crisis, we expect to see an increase in companies looking to outsourcing as a mean to achieve this.
Professional Services has seen postponement of some new projects as a result of Covid-19. These are expected to return when the situation settles.
Covid-19 related Business Continuity Services are in high demand. This resulted in expanding services with existing customers. In Germany, we signed a landmark agreement together with SAP in the municipality sector for the delivery of a new SuccessFactors cloud HR solution to the City of Krefeld's services organization. More than 60% of our Professional Services agreements are long term and recurring like. This is reflected in 80% of the revenue in the quarter being with the same customers that we served in the same quarter the previous year.
Improved financial performance expected to continue with additional EBIT improvements realized
As a follow up to our Vision 2020 EBIT improvement program, we finalised additional measures in Q2 realizing cost savings of approximately NOK 1 million per month from Q4 and onwards. Realized savings are primarily related to further overhead reduction and capacity adjustments in our Nordic Professional Services unit.
Based on the current financial performance we have our communicated 10% EBT target in sight.
Growing interest in the Zalaris share
Our business model with long term agreements and recurring revenue combined with a solid diversified customer base is increasingly in favor among investors. Since the beginning of the year, the number of Zalaris investors has increased by almost 30%. On behalf of all of us in #teamZalaris, thank you for your confidence!
5 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Financial Review
Revenue
Consolidated revenue for the second quarter 2020 amounted to NOK 198.4 million (Q2 2019: NOK
187.5 million), which was an increase of 5.8% from last year.
Nordics & Baltics
Revenue in the Nordic & Baltic region was NOK
- million in the second quarter, which was marginally lower than the figure last year of NOK
- million. The revenue growth during the quarter has been negatively impacted by Covid-19 in terms of new business generation and change orders from existing customers.
Central Europe
Revenue in the Central Europe region for the second quarter increased from NOK 66.5 million last year to NOK 76.5 million this year, an increase of 15%. The increase is explained by higher revenue from new and existing customers in Poland, as well as a higher EUR/NOK.
UK & Ireland
Revenue for the second quarter in the UK & Ireland region amounted to NOK 10.6 million, compared to NOK 8.2 million in the same quarter last year.
The region experienced an increase in sales from existing customers and an increase in opportunities from new potential customers.
Group Profits
Consolidated EBIT for the quarter was NOK 7.4 million (NOK 4.4 million).
Adjusted for one-off costs (NOK 2.0 million) relating to redundancies, calculated costs of the Company's share-based payment plan (NOK 0.5 million) and amortization of excess values on acquisition (NOK
2.8 million), the EBIT was NOK 12.7 million for the second quarter (NOK 7.4 million).
Through the EBIT-improvement program initiated in 2019, employee costs and other operating expenses have been reduced by approximately NOK 15 million for the quarter and NOK 27 million year-to-date compared to last year, when adjusted for currency effects. Thus, the Company's operational cost base has been significantly reduced, and has contributed to an increased operating cash flow. The full effect of these cost reductions on the profit and loss will materialise when new major customer projects are being implemented.
The Group had net financial income of NOK 19.8 million for the second quarter (net expense NOK 8.7 million), of which NOK 25.6 million (loss NOK 0.5 million) relates to an unrealized gain on the EUR 35 million bond loan and other foreign currency denominated balances.
The net profit for the quarter was NOK 22.4 million (loss NOK 3.4 million).
Total comprehensive income amounted to negative NOK 0.2 million (negative NOK 3.3 million), after currency translation difference of negative NOK 22.6 million.
Adjusted EBIT for the first six months was NOK
26.1 million (NOK 16.4 million). Unrealized currency loss on the EUR 35 million bond loan and interest expenses resulted in a net loss for the first six months of NOK 26.1 million (NOK 2.9 million). Total comprehensive income amounted to NOK 3.7 million (negative NOK 4.5 million) for the first six months.
6 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Business segment performance
Managed Services
The Managed Services segment grew by 2.4% during the second quarter 2020, compared to the same quarter last year, and amounted to NOK
137.1 million for the quarter. Managed service revenue contributed to 69.1% (71.4%) of total revenue for the Group.
Revenue Managed Services (NOKm):
153,2 | |
142,3 | |
133,9 | 137,1 |
130,4 | |
Q2 2019 | Q3 2019 | Q4 2019 | Q1 2020 | Q2 2020 |
The EBIT for Managed Services for the second quarter 2020 was NOK 16.0 million (NOK 15.8 million).
Professional Services
Revenue in the Professional Services segment amounted to NOK 61.3 million for the second quarter 2020, an increase of 14.1% from last year.
Revenue Professional Services (NOKm):
61,3
60,3
58,3
53,7
53,0
Q2 2019 | Q3 2019 | Q4 2019 | Q1 2020 | Q2 2020 |
The EBIT for Professional Services for the second quarter was NOK 4.1 million (NOK 3.5 million), including one-off redundancy costs of NOK 2.0 million.
Financial position and cash flow
Zalaris had total assets of NOK 750.4 million as of 30 June 2020, compared to NOK 772.5 million at 31 March 2020.
Cash and cash equivalents were NOK 129.0 million as of 30 June 2020, an increase of NOK 41.5 million from the end of the previous quarter.
Total equity as of 30 June 2020 was NOK 101.5 million, compared to NOK 95.9 million as of 31 March 2020. This corresponds to an equity ratio of 13.5% (12.4%).
The Company holds 503,521 own shares at 30 June 2020.
Net interest-bearing debt (interest-bearing debt less cash and cash equivalents) decreased from NOK
344.5 million at 31 March 2020 to NOK 277.9 million at 30 June 2020. The decrease is mainly due increased cash balances and a reduction in the NOK value of the EUR 35 million bond loan, as a result of the appreciation of NOK during the period.
Operating cash flow during the second quarter 2020 was NOK 45.4 million (NOK 5.0 million). The increase compared to last year is mainly due to a reduction in working capital, including NOK 8 - 10 million in deferred VAT payments (Coivd-19 relief) and a lower cost base.
Net cash flow from investing activities for the second quarter was negative NOK 3.6 million (negative NOK 7.1 million), mainly relating to internal development projects. Net cash flow from financing activities for the second quarter was negative NOK 0.8 million (negative NOK 7.3 million).
Cash and cash equivalents balance at 30 June 2020 was NOK 129.0 million (NOK 59.6 million).
Based on the current financial performance of the Company the Board will propose a dividend of minimum NOK 0.5 per share for 2020.
7 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
EBIT improvement program
As communicated in previous reports, Zalaris launched an EBIT improvement program in 2019, Vision2020 targeting NOK 4,7 million monthly cost reductions by Q1 2020. This included streamlining of the organization, ramp-up of digitizing efforts, automating services and increasing Robotic Process Automation (RPA) projects, all aimed at increasing quality in deliveries and reducing costs. As part of the program the total number of FTEs was reduced by approximately 52 (-6%) from when the program was launched.
In Q2 we executed a follow up of Vision2020, realizing additional NOK 1 million in monthly cost reductions by Q4 2020 through a reorganizing of the Nordic Professional Services organization to align with the Professional Services organizations in our other regions. Key actions taken were:
- Moving consultants primarily working with Managed Services customers to the Managed Services Organization
- Realigning the Nordic Professional Services organization to focus on advisory and implementation of SAP Cloud based HR solutions.
- Adjusting capacity to demand resulting in the downsizing of approximately ten employees.
Other ongoing cost based EBIT initiatives focus on:
- Increased utilization of our near- and offshore capabilities
- Automation of standardized processes through digitization and Robotic Process Automation.
Outlook
The market fundamentals remain strong and Zalaris' key markets are expected to grow in the foreseeable future. The Company is well positioned to capture part of this growth through new customers and by expanding the service offering to existing customers. The Company's financial results are expected to improve from the levels observed in 2019, as a result of the cost reduction initiatives implemented in 2019 through the EBIT improvement program, and further optimization initiatives in 2020. This include
streamlining of the organization, ramp-up of digitizing efforts, automating services and increasing Robotic Process Automation (RPA) projects, all aimed at increasing quality in deliveries and reducing costs. The COVID-19 pandemic has had limited financial impact on the Company so far, but revenue could be impacted negatively in the time to come, depending on the scope and duration of COVID-19. However, the underlying market fundamentals remain strong, and the long-term outlook is positive.
The Board of Directors of Zalaris ASA
Oslo, 17 August 2020
8 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Interim Consolidated Financial Statements
Consolidated Statement of Profit and Loss
2020 | 2019 | 2020 | 2019 | 2019 | ||
(NOK 1 000) | Notes | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec |
unaudited | unaudited | unaudited | unaudited | |||
Revenue | 2 | 198 445 | 187 548 | 399 056 | 379 899 | 776 792 |
Operating expenses | ||||||
License costs | 16 237 | 13 904 | 33 235 | 28 832 | 67 981 | |
Personnel expenses | 4 | 113 131 | 106 911 | 224 710 | 214 480 | 438 543 |
Other operating expenses | 39 759 | 40 381 | 80 940 | 82 416 | 166 887 | |
Depreciation and impairments | 848 | 1 035 | 1 748 | 2 033 | 4 048 | |
Depreciation right-of-use assets | 7 | 4 941 | 5 456 | 10 232 | 10 800 | 21 932 |
Amortisation intangible assets | 6 | 7 223 | 6 735 | 13 831 | 13 432 | 26 704 |
Amortisation implementation costs customer projects | 3 | 8 939 | 8 714 | 17 541 | 17 011 | 36 606 |
Total operating expenses | 191 078 | 183 136 | 382 238 | 369 005 | 762 701 | |
Operating profit (EBIT) | 7 367 | 4 412 | 16 818 | 10 895 | 14 091 | |
Financial items | ||||||
Financial income | 5 | 1 605 | (196) | 4 347 | 440 | 2 632 |
Financial expense | 5 | (7 380) | (8 003) | (15 820) | (15 787) | (29 057) |
Unrealized foreign exchange gain/(loss) | 5 | 25 560 | (511) | (40 739) | 7 775 | 2 375 |
Net financial items | 19 785 | (8 710) | (52 211) | (7 572) | (24 051) | |
Profit before tax | 27 152 | (4 298) | (35 393) | 3 323 | (9 960) | |
Tax expense | (4 733) | 974 | 9 261 | (383) | 2 950 | |
Profit for the period | 22 420 | (3 324) | (26 132) | 2 940 | (7 011) | |
Earnings per share: | ||||||
Basic earnings per share (NOK) | 1,14 | (0,17) | (1,33) | 0,15 | (0,36) | |
Diluted earnings per share (NOK) | 1,11 | (0,17) | (1,33) | 0,15 | (0,36) |
Consolidated Statement of Comprehensive Income
2020 | 2019 | 2020 | 2019 | 2019 | ||
(NOK 1 000) | Notes | Apr-Jun | Apr-Jun | Jan-Mar | Jan-Mar | Jan-Dec |
unaudited | unaudited | unaudited | unaudited | |||
Profit for the period | 22 420 | (3 324) | (26 132) | 2 940 | (7 011) | |
Other comprehensive income | ||||||
Items that will be reclassified to profit and loss in subsequent periods | ||||||
Currency translation differences | (22 576) | (27) | 29 831 | (7 408) | 1 688 | |
Total other comprehensive income | (22 576) | (27) | 29 831 | (7 408) | 1 688 | |
Total comprehensive income | (156) | (3 351) | 3 700 | (4 468) | (5 322) |
9 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Consolidated Statement of Financial Position
2020 | 2019 | 2019 | ||
(NOK 1 000) | Notes | 30. Jun | 30. Jun | 31. Dec |
unaudited | unaudited | |||
ASSETS | ||||
Non-current assets | ||||
Intangible assets | 130 270 | 136 535 | 132 950 | |
Goodwill | 165 661 | 148 535 | 153 248 | |
Total intangible assets | 6 | 295 931 | 285 070 | 286 198 |
Deferred tax asset | 11 728 | 6 096 | 11 710 | |
Fixed assets | ||||
Right-of-use assets | 7 | 29 710 | 45 001 | 34 849 |
Property, plant and equipment | 34 836 | 33 981 | 33 137 | |
Total fixed assets | 64 546 | 78 981 | 67 986 | |
Total non-current assets | 372 205 | 370 147 | 365 894 | |
Current assets | ||||
Trade accounts receivable | 138 118 | 162 531 | 148 614 | |
Customer projects | 3 | 84 763 | 99 665 | 88 808 |
Other short-term receivables | 26 391 | 32 869 | 27 275 | |
Cash and cash equivalents | 8 | 128 953 | 59 570 | 82 448 |
Total current assets | 378 224 | 354 635 | 347 145 | |
TOTAL ASSETS | 750 430 | 724 783 | 713 038 |
10 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Consolidated Statement of Financial Position
2020 | 2019 | 2019 | ||
(NOK 1 000) | Notes | 30. Jun | 30. Jun | 31. Dec |
unaudited | unaudited | |||
EQUITY AND LIABILITIES | ||||
Equity | ||||
Paid-in capital | ||||
Share capital | 1 962 | 2 006 | 1 957 | |
Other paid in equity | 4 958 | 2 609 | 3 804 | |
Share premium | 35 565 | 40 737 | 34 252 | |
Total paid-in capital | 42 485 | 45 352 | 40 014 | |
Other equity | 32 224 | (7 980) | (374) | |
Retained earnings | 26 813 | 62 722 | 52 526 | |
Total equity | 101 522 | 100 094 | 92 166 | |
Liabilities | ||||
Non-current liabilities | ||||
Deferred tax | 13 323 | 25 049 | 25 313 | |
Interest-bearing loans | 9 | 405 514 | 354 507 | 362 487 |
Lease liabilities | 7 | 14 478 | 22 673 | 16 536 |
Total long-term liabilities | 433 315 | 402 230 | 404 337 | |
Current liabilities | ||||
Trade accounts payable | 17 638 | 17 319 | 29 845 | |
Customer projects liabilities | 3 | 52 255 | 60 645 | 55 740 |
Interest-bearing loans | 9 | 1 378 | 13 786 | 6 571 |
Lease liabilities | 7 | 16 483 | 21 802 | 19 099 |
Income tax payable | 4 610 | 588 | 5 408 | |
Public duties payable | 48 067 | 31 595 | 37 314 | |
Other short-term liabilities | 74 054 | 75 112 | 61 464 | |
Derivatives | 1 108 | 1 613 | 1 095 | |
Total short-term liabilities | 215 592 | 222 459 | 216 535 | |
Total liabilities | 648 907 | 624 689 | 620 873 | |
TOTAL EQUITY AND LIABILITIES | 750 430 | 724 783 | 713 038 |
11 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Consolidated Statement of Cash Flow
2020 | 2019 | 2020 | 2019 | 2019 | ||
(NOK 1 000) | Notes | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec |
unaudited | unaudited | unaudited | unaudited | |||
Cash Flow from operating activities | ||||||
Profit (Loss) before tax | 27 152 | (4 298) | (35 393) | 3 323 | (9 960) | |
Net financial items | 5 | (19 785) | 8 709 | 52 211 | 7 571 | 24 051 |
Share-based payments | 466 | 199 | 1 154 | 581 | 1 743 | |
Depreciation and impairments | 848 | 1 037 | 1 748 | 2 035 | 4 049 | |
Depreciation right-of-use assets | 7 | 4 940 | 5 456 | 10 232 | 10 800 | 21 932 |
Amortisation intangible assets | 6 | 7 223 | 6 735 | 13 831 | 13 432 | 26 705 |
Depreciation implementation costs customer projects | 3 | 8 939 | 8 714 | 17 541 | 17 011 | 36 606 |
Recognized customer projects assets | 3 | (4 994) | (11 004) | (9 214) | (22 246) | (29 505) |
Recognized customer projects liabilities | (5 693) | (6 028) | (6 049) | (7 765) | (8 545) | |
Taxes paid | (1 808) | - | (1 256) | - | (6 356) | |
Changes in accounts receivable | 23 795 | 11 411 | 10 496 | (4 413) | 9 504 | |
Changes in accounts payable | (3 483) | 300 | (12 207) | (7 039) | 5 487 | |
Changes in other items | 13 397 | (11 734) | 30 861 | (20 332) | (8 313) | |
Interest received | 56 | 23 | 109 | 140 | 162 | |
Interest paid | (5 657) | (4 559) | (11 763) | (10 163) | (25 052) | |
Net cash flow from operating activities | 45 398 | 4 961 | 62 301 | (17 065) | 42 508 | |
Cash flows to investing activities | ||||||
Investment in fixed and intangible assets | (3 593) | (7 101) | (7 270) | (11 349) | (25 462) | |
Net cash flow from investing activities | (3 593) | (7 101) | (7 270) | (11 349) | (25 462) | |
Cash flows from financing activities | ||||||
Sale/(Buyback) of own shares | 1 332 | (2 061) | 1 332 | (4 419) | (10 934) | |
Payment of lease liabilities | (4 114) | (6 169) | (10 047) | (12 254) | (22 807) | |
Repayment of loan | 1 940 | 935 | (1 443) | (1 580) | (6 320) | |
Net cash flow from financing activities | (841) | (7 295) | (10 157) | (18 253) | (40 062) | |
Net changes in cash and cash equivalents | 40 964 | (9 435) | 44 873 | (46 667) | (23 016) | |
Net foreign exchange difference | 497 | (343) | 1 630 | (1 607) | (2 379) | |
Cash and cash equivalents at the beginning of the period | 87 492 | 69 348 | 82 450 | 107 844 | 107 844 | |
Cash and cash equivalents at the end of the period | 128 953 | 59 570 | 128 953 | 59 570 | 82 450 |
12 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Consolidated Statement of Changes in Equity
Share | Other paid in Total paid-in | Retained | |||||
(NOK 1000) | Share capital | premium | equity | equity | Other equity earnings | Total equity | |
Equity at 01.01.2019 | 2 003 | 45 140 | 2 061 | 49 204 | (33) | 59 733 | 108 905 |
Profit of the year | 2 940 | 2 940 | |||||
Other comprehensive income | (15) | (15) | (7 393) | (7 408) | |||
Buyback of own shares | (4 419) | (4 419) | (4 419) | ||||
Share based payments | 581 | 581 | 581 | ||||
Other changes | (555) | 49 | (506) | ||||
Equity at 30.06.2019 | 2 003 | 40 721 | 2 627 | 45 351 | (7 980) | 62 722 | 100 094 |
Unaudited | |||||||
Profit of the year | (9 951) | (9 951) | |||||
Other comprehensive income | 15 | 15 | 9 081 | 9 096 | |||
Buyback of own shares | (46) | (6 469) | (6 515) | (6 515) | |||
Share based payments | 1 162 | 1 162 | 1 162 | ||||
Other changes | (1 476) | (245) | (1 720) | ||||
Equity at 30.12.2019 | 1 957 | 34 252 | 3 804 | 40 013 | (375) | 52 526 | 92 165 |
Profit of the year | (26 132) | (26 132) | |||||
Other comprehensive income | 29 831 | 29 831 | |||||
(Buyback)/sale of own shares | 5 | 1 312 | 1 318 | 1 318 | |||
Share based payments | 1 154 | 1 154 | 1 154 | ||||
Other changes | 2 767 | 419 | 3 186 | ||||
Equity at 30.06.2020 | 1 962 | 35 565 | 4 958 | 42 485 | 32 224 | 26 813 | 101 522 |
Unaudited |
13 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Notes to the condensed interim consolidated condensed financial statements
Note 1 - General Information and basis for preparation
General information
Zalaris ASA (the Group) is a public limited company incorporated in Norway. The Group's main office is in Hovfaret 4, Oslo, Norway. The Group delivers full-service outsourced personnel and payroll services.
Basis for preparation
These interim consolidated condensed financial statements are prepared in accordance with International Accounting Standard 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union (EU). The condensed consolidated interim financial statements do not include all the information and disclosures required by International Financial Reporting Standards (IFRS) for a complete set of financial statements, and these condensed interim financial statements should be read in conjunction with the annual financial statements. The interim condensed consolidated financial statements for the three months ended 30 June 2020, have not been audited or reviewed by the auditors.
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2019.
Going concern
With reference to the Norwegian Accounting Act § 3-3, the Board confirms its belief that conditions exist for continuing operations and that these interim consolidated condensed financial statements have been prepared in accordance with the going concern principle.
14 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Note 2 - Segment Information
The Company's operations are split into two main business segments; Managed Services and Professional Services.
Managed Services includes a full range of payroll and HR outsourcing services, such as payroll processing, time and attendance, travel expenses as well as related cloud system solutions and services. This includes additional cloud-based HR functionality to existing outsourcing customers as talent management, digital personnel archive, HR analytics, mobile solutions, etc.
Professional Services includes deliveries of change projects based on Zalaris templates or implementation of customer-specific functionality. This business segment also assists with cost-effective maintenance and support of customers' own on-premise solutions. A large portion of these services are of recurring nature and much of the services are based on long-term customer relationships.
Information is organized by business area and geography. The reporting format is based on the Group's management and internal reporting structure. Items that are not allocated are mainly intercompany sales, interest- bearing loans and other associated expenses and assets related to administration of the Group. The Group's executive management is the chief decision maker in the Group. The investing activities comprise total expenses in the period for the acquisition of assets that have an expected useful life of more than one year. The operating assets and liabilities of the Group are not allocated between segments.
2020 Apr-Jun | ||||
Managed | Professional | Gr.Ovhd & | ||
(NOK 1 000) | Services | Services | Unallocated | Total |
Revenue, external | 137 109 | 61 336 | - | 198 445 |
Operating expenses | (109 598) | (54 585) | (4 944) | (169 127) |
EBITDA | 27 511 | 6 751 | (4 944) | 29 318 |
Depreciation and amortisation | (11 506) | (2 696) | (7 748) | (21 950) |
EBIT | 16 005 | 4 054 | (12 692) | 7 367 |
Net financial income/(expenses) | 19 785 | 19 785 | ||
Income tax | (4 733) | (4 733) | ||
Profit for the period | 16 005 | 4 054 | 2 360 | 22 420 |
Cash flow from investing activities | (3 593) | |||
2019 Apr-Jun* | ||||
Managed | Professional | Gr.Ovhd & | ||
(NOK 1 000) | Services | Services | Unallocated | Total |
Revenue, external | 133 869 | 53 678 | - | 187 548 |
Operating expenses | (105 818) | (47 673) | (7 705) | (161 196) |
EBITDA | 28 051 | 6 005 | (7 705) | 26 352 |
Depreciation and amortisation | (12 282) | (2 499) | (7 160) | (21 940) |
EBIT | 15 770 | 3 507 | (14 865) | 4 412 |
Net financial income/(expenses) | (8 710) | (8 710) | ||
Income tax | 974 | 974 | ||
Profit for the period | 15 770 | 3 507 | (22 601) | (3 324) |
Cash flow from investing activities | (11 349) |
15 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
2020 Jan-Jun | ||||
Managed | Professional | Gr.Ovhd & | ||
(NOK 1 000) | Services | Services | Unallocated | Total |
Revenue, external | 279 457 | 119 599 | - | 399 056 |
Operating expenses | (223 059) | (104 361) | (11 466) | (338 885) |
EBITDA | 56 398 | 15 239 | (11 466) | 60 171 |
Depreciation and amortisation | (23 656) | (4 906) | (14 790) | (43 352) |
EBIT | 32 742 | 10 333 | (26 256) | 16 818 |
Net financial income/(expenses) | (52 211) | (52 211) | ||
Income tax | 9 261 | 9 261 | ||
Profit for the period | 32 742 | 10 333 | (69 206) | (26 132) |
Cash flow from investing activities | (7 270) | |||
2019 Jan-Jun* | ||||
Managed | Professional | Gr.Ovhd & | ||
(NOK 1 000) | Services | Services | Unallocated | Total |
Revenue, external | 283 082 | 96 818 | - | 379 899 |
Operating expenses | (224 961) | (82 730) | (18 038) | (325 728) |
EBITDA | 58 121 | 14 088 | (18 038) | 54 171 |
Depreciation and amortisation | (24 925) | (4 062) | (14 289) | (43 277) |
EBIT | 33 196 | 10 026 | (32 327) | 10 894 |
Net financial income/(expenses) | (7 571) | (7 571) | ||
Income tax | (383) | (383) | ||
Profit for the period | 33 196 | 10 026 | (40 281) | 2 940 |
Cash flow from investing activities | (11 349) | |||
2019 Jan-Dec* | ||||
Managed | Professional | Gr.Ovhd & | ||
(NOK 1.000) | Services | Services | Unallocated | Total |
Revenue, external | 553 691 | 223 101 | - | 776 792 |
Operating expenses | (446 455) | (192 606) | (34 351) | (673 411) |
EBITDA | 107 236 | 30 495 | (34 351) | 103 380 |
Depreciation and amortisation | (52 279) | (9 534) | (27 477) | (89 290) |
EBIT | 54 957 | 20 961 | (61 828) | 14 090 |
Net financial income/(expenses) | (24 051) | (24 051) | ||
Income tax | 2 950 | 2 950 | ||
Profit for the period | 54 957 | 20 961 | (82 929) | (7 011) |
Cash flow from investing activities | (25 462) |
*Revenue from certain consulting services previously report as part of Managed Services have been moved to Professional Services from 1 January 2020. Business development costs previously included within Group Overhead has been allocated to the business segments from 1 January 2020. Comparable historical information has been updated accordingly.
Geographic Information
The Group's operations are carried in several countries, and information regarding revenue based on geography is provided below. Information is based on location of the entity generating the revenue, which to a large extent, corresponds to the geographical location of the customers.
16 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Revenue from external customers attributable to:
2020 | 2019 | 2020 | 2019 | 2019 | |
(NOK 1 000) | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec |
Northern Europe | 111 364 | 112 833 | 225 033 | 220 746 | 449 893 |
Central Europe | 76 496 | 66 507 | 153 880 | 141 322 | 294 135 |
UK & Ireland | 10 585 | 8 208 | 20 143 | 17 831 | 32 764 |
Total | 198 445 | 187 548 | 399 056 | 379 899 | 776 792 |
Note 3 - Revenue from contracts with customers
Disaggregated revenue information
The Group's revenue from contracts with customers has been disaggregated and presented in note 2.
Contract balances:
2020 | 2019 | 2019 | |
(NOK 1 000) | 30. Jun | 30. Jun | 31. Dec |
Trade receivables | 138 624 | 162 721 | 148 614 |
Customer project assets | 84 763 | 99 665 | 88 808 |
Customer project liabilities | (52 255) | (60 645) | (55 740) |
Prepayments from customers | (13 295) | 14 800 | (9 608) |
Customer project assets are costs specific to a given contract, generate or enhance the Group's resources that will be used in satisfying performance obligations in the future, and are recoverable. These costs are deferred and amortized evenly over the period the outsourcing services are provided.
Customer project liabilities are prepayments from customer specific to a given contract and are recognized as revenue evenly as the Group fulfills the related performance obligations over the contract period.
Prepayments from customers comprises a combination of short- and long-term advances from customers. The short-term advances are typically deferred revenues related to smaller projects or change orders related to the system solution. The long-term liabilities relate to initial advances paid upon signing the contract. These advances are contracted to be utilized by the customer to either transformation-, change- or other projects. These advances are open for application until specified, or when the contract is terminated, where the eventual remainder of the amount become the property of Zalaris and is hence rendered as income by the Group.
Movements in customer project assets through the period:
(NOK 1 000) | 2020 | 2019 | 2020 | 2019 | 2019 |
Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | 31. Dec | |
Opening balance in the period | 90 103 | 97 741 | 88 808 | 97 272 | 97 272 |
Cost capitalized | 4 994 | 11 004 | 9 214 | 22 246 | 29 505 |
Amortization | (8 939) | (8 714) | (17 541) | (17 011) | (36 606) |
Disposals & currency | (1 396) | (365) | 4 282 | (2 841) | (1 363) |
Customer projects assets end of period | 84 763 | 99 667 | 84 763 | 99 667 | 88 808 |
17 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Movements in customer project liabilities through the period:
(NOK 1 000) | 2020 | 2019 | 2020 | 2019 | 2019 |
Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec | |
Opening balance in the period | (55 383) | (61 501) | (55 740) | (64 284) | (64 284) |
Revenue deferred | (3 083) | (6 538) | (5 358) | (10 373) | (17 188) |
Revenue recognized | 5 546 | 6 028 | 11 407 | 11 600 | 28 505 |
Disposals & currency | 664 | 1 365 | (2 565) | 2 411 | (2 773) |
Customer project liabilities end of period | (52 255) | (60 645) | (52 255) | (60 645) | (55 740) |
Note 4 - Personnel expenses
2020 | 2019 | 2020 | 2019 | 2019 | |
(NOK 1 000) | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec |
Salary | 94 642 | 92 408 | 186 873 | 188 663 | 366 516 |
Tantieme and variable compensation | 6 405 | 6 360 | 8 962 | 9 814 | 19 437 |
Social security tax | 11 844 | 12 837 | 25 766 | 27 017 | 54 099 |
Pension costs | 4 918 | 5 080 | 9 819 | 10 318 | 19 333 |
Other expenses | 2 279 | 4 589 | 7 173 | 8 417 | 24 953 |
Capitalised development expenses | (1 962) | (3 361) | (4 669) | (7 504) | (16 290) |
Capitalised implementation costs customer projects | (4 994) | (11 003) | (9 214) | (22 245) | (29 505) |
Total personnel expenses | 113 131 | 106 911 | 224 710 | 214 480 | 438 543 |
18 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Note 5 - Finance income and finance expense
(NOK 1 000)
Interest income on bank accounts and receivables Currency gain
Other financial income
Finance income
Interest exp. on financial liab. measured at amortised cost Currency loss
Unrealised foreign currency loss Interest expense on leasing Other financial expenses
Finance expenses
Net financial items
2020 | 2019 | 2020 | 2019 | 2019 |
Apr-Jun | Apr-JunJan-Jun | Jan-JunJan-Dec | ||
56 | 34 | 109 | 69 | 160 |
1 335 | 273 | 3 943 | 1 008 | 1 916 |
215 | -503 | 296 | -637 | 556 |
1 605 | -196 | 4 347 | 440 | 2 632 |
5 145 | 5 320 | 10 928 | 9 951 | 19 253 |
773 | 597 | 2 260 | 2 445 | 3 377 |
-25 559 | 511 | 40 739 | -7 775 | -2 375 |
402 | -602 | 847 | - | 2 126 |
1 060 | 2 688 | 1 786 | 3 390 | 4 302 |
-18 179 | 8 514 | 56 559 | 8 011 | 26 683 |
19 785 | -8 710 | -52 211 | -7 571 | -24 051 |
Note 6 - Intangible assets
Licenses | Intern. | Internally | Customer | Goodwill | Total | |
and | developed | developed AuC | Relation & | |||
(NOK 1 000) | software | software | Contracts | |||
Book value 01.01.2020 | 4 505 | 34 652 | 17 889 | 75 905 | 153 248 | 286 198 |
Additions of the period | - | (659) | 2 971 | 4 628 | - | 6 940 |
Reclassifications | - | 15 009 | (15 009) | - | - | - |
Disposals and currency effects | 248 | 2 081 | 740 | 1 142 | 12 413 | 16 623 |
This period ordinary amortisation | (944) | (7 394) | - | (5 494) | - | (13 831) |
Book value 30.6.2020 | 3 808 | 43 689 | 6 592 | 76 181 | 165 660 | 295 930 |
Book value 01.01.2019 | 9 057 | 28 768 | 19 937 | 85 302 | 151 996 | 295 059 |
Additions of the period | 101 | 915 | 8 705 | - | - | 9 721 |
Reclassifications | - | 17 262 | (17 262) | - | - | 0 |
Disposals and currency effects | (79) | (69) | (766) | (1 903) | (3 461) | (6 278) |
This period ordinary amortisation | (1 634) | (6 846) | - | (4 953) | - | (13 433) |
Book value 30.6.2019 | 7 445 | 40 031 | 10 614 | 78 446 | 148 535 | 285 070 |
Book value 01.01.2019 | 9 057 | 28 768 | 19 937 | 85 302 | 151 996 | 295 059 |
Additions of the period | 135 | 1 579 | 21 389 | - | - | 23 103 |
Reclassifications | - | 18 055 | (18 055) | - | - | - |
Disposals and currency effects | (1 744) | (39) | (5 381) | 652 | 1 253 | (5 259) |
This period ordinary amortisation | (2 944) | (13 711) | - | (10 049) | - | (26 705) |
Book value 31.12.2019 | 4 505 | 34 652 | 17 889 | 75 905 | 153 248 | 286 198 |
Useful life | 3-10 years | 5 years | N/A | 10 years | N/A | |
Depreciation method | linear | linear | linear |
19 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Note 7 - Right-of-use assets and lease liabilities
Zalaris leases several assets such as buildings, equipment and vehicles. The Group's right-of-use assets are categorized and presented in the table below:
Right-of-use assets | 2020 | 2019 | 2019 |
(NOK 1 000) | 30. Jun | 30. Jun | 31. Dec |
Opening balance | 34 849 | 52 326 | 52 326 |
Adjustments and additions | 3 911 | 3 474 | 4 455 |
Depreciation and impairments | 10 232 | 10 800 | 21 932 |
Terminations | 43 | - | - |
Foreign currency transaction gain/(loss) | -1 224 | -1 | - |
Closing balance | 29 710 | 45 001 | 34 849 |
Lower of remaining lease term or economic life. Linear depreciation 1-10 years | |||
Lease liabilities | 2020 | 2019 | 2019 |
(NOK 1 000) | 30. Jun | 30. Jun | 31. Dec |
Opening balance | 35 635 | 52 326 | 52 326 |
Additions and lease modifications | 3 911 | 3 474 | 4 455 |
Lease payments including interest | 10 894 | 11 097 | 20 683 |
Foreign currency transaction gain/(loss) | 2 310 | -228 | -463 |
Closing balance | 30 962 | 44 475 | 35 635 |
Lease liabilities | 2020 | 2019 | 2019 |
(NOK 1 000) | 30. Jun | 30. Jun | 30. Jun |
Short-term | 16 483 | 21 802 | 19 099 |
Long-term | 14 478 | 22 673 | 16 536 |
Total lease liabilities at 30 June 2020 | 30 961 | 44 475 | 35 635 |
Note 8 - Cash and cash equivalents and short term deposits
(NOK 1 000)
Cash in hand and at bank - unrestricted funds
Deposit accounts - guarantee rent obligations - restricted funds Employee withheld taxes - restricted funds
Cash and cash equivalents
2020 | 2019 | 2019 |
30. Jun | 30. Jun | 31. Dec |
122 873 | 41 667 | 75 182 |
2 552 | 14 689 | 2 480 |
3 528 | 3 214 | 4 787 |
128 953 | 59 570 | 82 448 |
20 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Note 9 - Interest-bearing loans and borrowings
2020 | 2019 | 2019 | |||
(NOK 1 000) | Annual interest | Maturity | 30. Jun | 30. Jun | 31. Dec |
Bond loan | 3 m Euribor + 4.75% | 28.09.2023 | 380 421 | 339 494 | 345 188 |
Loan fees bond | 28.09.2023 | (5 859) | (6 654) | (6 760) | |
Commerzbank - DE | 1.3% | 31.12.2031 | 13 340 | 13 322 | 13 834 |
Landesbank Baden-Würtenberg | 4.0% | 31.12.2022 | 2 019 | - | 2 200 |
Landesbank Baden-Würtenberg | 1.95 % | 31.12.2031 | 11 101 | 13 786 | 9 270 |
MBG | From 5.0% to 6.5% | 2020-2026 | 5 869 | 7 057 | 5 326 |
SG Finance loans | From 4.0% to 6.7% | 2019-2023 | - | 1 287 | - |
Total interest-bearing loans | 406 892 | 368 293 | 369 058 | ||
Total long-terminterest-bearing loans | 405 514 | 354 507 | 362 487 | ||
Total short-terminterest-bearing loans | 1 378 | 13 786 | 6 571 | ||
Total interest-bearing loans | 406 892 | 368 293 | 369 058 |
The Company's bond loan of EUR 35 million is listed on the Oslo Stock Exchange. The loan in Commerzbank DE relates to the office building in Leipzig, which is owned by the Company.
Note 10 - Transactions with Related Parties
Purchase from related parties:
(NOK 1 000) | 2020 | 2019 | 2020 | 2019 | 2019 | |
Related party | Transaction | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec |
Rayon Design AS 1) | Management Services | 815 | 411 | 953 | 558 | 1 556 |
Haug Advisory AS 2) | Management Services | - | - | - | 100 | 200 |
Total | 815 | 411 | 953 | 658 | 1 756 |
- Hans-PetterMellerud, CEO, owns 40% of Rayon Design AS though his company Norwegian Retail AS
- Jon Erik Haug, Board Member of Zalaris ASA, owns 100% of Haug Advisory AS
Note 11 - Events after Balance Sheet Date
There have been no events after the balance sheet date significantly affecting the Group's financial position.
21 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Responsibility statement
We confirm, to the best of our knowledge, that the condensed set of financial statements for the period from January 1 to June 30 2020 has been prepared in accordance with IAS 34 - Interim Financial Reporting, and gives a true and fair view of the Group's assets, liabilities, financial position and profit or loss as a whole. We also confirm, to the best of our knowledge, that the interim management report includes a fair review of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, a description of the principal risks and uncertainties for the remaining six months of the financial year, and major related parties transactions.
Oslo, 17 August 2020 | |
The Board of Directors of Zalaris ASA | |
____________________________ | ____________________________ |
Adele Norman Pran | Liselotte Hägertz Engstam |
sign. | sign. |
____________________________ | ____________________________ |
Corinna Schäfer | Erik Langaker |
sign. | sign. |
____________________________ | ____________________________ |
Jon Erik Haug | Stefan Charette |
sign. | sign. |
____________________________ | |
Jan Koivurinta | |
sign. |
22 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Alternative Performance Measures (APMs)
Zalaris' financial information is prepared in accordance with IFRS. In addition, financial performance measures (APMs) are used by Zalaris to provide supplemental information to enhance the understanding of the Group's underlying financial performance. These APMs take into consideration income and expenses defined as items regarded as special due to their nature and include among others restructuring provisions and write-offs. Financial APMs should not be considered as a substitute for measures of performance in accordance with IFRS. Disclosures of APMs are subject to established internal control procedures.
Adjusted EBITDA and EBIT
EBIT, earnings before interest and tax is defined as the earnings excluding the effects of how the operations where financed, taxed and excluding foreign exchange gains & losses. EBIT is used as a measure of operational profitability. EBITDA is before depreciation, amortization and impairment of tangible assets and in-house development projects. To abstract non-recurring or income not reflective of the underlying operational performance, the Group also lists the adjusted EBIT and EBITDA. Adjusted EBIT is defined as EBIT excluding non-recurring costs, costs relating to share based payments to employees, and amortization of excess values on acquisition. Adjusted EBITDA is EBITDA excluding non-recurring costs and costs relating to share based payments to employees, but after depreciation of right-of-use assets.
(NOK 1 000) EBITDA Restructuring costs Share-based payments Depreciation right-of-use assets (IFRS 16 effect) Adjusted EBITDA
(NOK 1 000) EBIT Restructuring costs Share-based payments Amortization of excess values on acquisition Adjusted EBIT
2020 | 2019 | 2020 | 2019 | 2019 |
Apr-Jun | Apr-Jun | Jan-Jun | Jan-JunJan-Dec | |
29 318 | 26 352 | 60 171 | 54 171 | 103 381 |
2 022 | - | 2 598 | - | 4 259 |
467 | 492 | 1 154 | 581 | 1 841 |
(4 941) | (5 456) | (10 232) | (10 800) | (21 932) |
26 866 | 21 388 | 53 690 | 43 953 | 87 549 |
2020 | 2019 | 2020 | 2019 | 2019 |
Apr-Jun | Apr-Jun | Jan-Jun | Jan-JunJan-Dec | |
7 367 | 4 412 | 16 818 | 10 895 | 14 091 |
2 022 | - | 2 598 | - | 4 259 |
467 | 492 | 1 154 | 581 | 1 841 |
2 834 | 2 473 | 5 511 | 4 953 | 10 049 |
12 690 | 7 377 | 26 081 | 16 429 | 30 240 |
Free cash flow
Free cash flow represents the cash flow that Zalaris generates after capital investments in the Group's business operations have been made. Free cash flow is defined as operational cash flow.
2020 | 2019 | 2020 | 2019 | 2019 | |
(NOK 1 000) | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec |
Net cash flow from operating activities | 45 398 | 4 961 | 62 301 | (17 065) | 42 508 |
Investment in fixed and intangible assets | (3 593) | (7 101) | (7 270) | (11 349) | (25 462) |
Free cash flow | 41 805 | (2 140) | 55 031 | (28 414) | 17 046 |
23 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Net interest-bearing debt (NIBD)
Net interest-bearing debt (NIBD), consists of interest-bearing liabilities, less cash and cash equivalents.
The Group risk of default and financial strength is measured by the net interest-bearing debt.
(NOK 1 000) Cash and cash equivalents Interest-bearing loans and borrowings - long-term Interest bearing loans and borrowings - short-term Net interest-bearing debt (NIBD)
2020 | 2019 | 2019 |
30.Jun | 30.Jun | 31.Dec |
128 953 | 59 570 | 82 448 |
(405 514) | (354 507) | (362 487) |
(1 378) | (13 786) | (6 571) |
(277 939) | (308 723) | (286 610) |
Full time equivalents (FTEs)
The ratio of the total number of normal agreed working hours for all employees (part-time or full-time) by the number of normal full-time working hours in that period (i.e. one FTE is equivalent to one employee working full- time).
24 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Key Figures
(NOKm unless otherwise stated) | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | Q1 2020 | Q2 2020 |
Revenues | 192,4 | 187,5 | 190,7 | 206,2 | 200,6 | 198,4 |
Revenue growth (YoY) | 3,3 % | -0,7 % | 8,2 % | 6,2 % | 4,3 % | 5,8 % |
EBITDA adjusted | 22,9 | 21,4 | 24,7 | 18,9 | 26,8 | 26,9 |
EBITDA margin | 11,9 % | 11,4 % | 12,9 % | 9,2 % | 13,4 % | 13,5 % |
EBIT adjusted | 9,3 | 7,4 | 8,9 | 5,0 | 13,4 | 12,7 |
EBIT margin | 4,9 % | 3,9 % | 4,6 % | 2,4 % | 6,7 % | 6,4 % |
Profit Before Tax | 7,6 | (4,3) | (9,3) | (4,0) | (62,5) | 27,2 |
Income Tax Expense | (1,4) | 1,0 | 2,7 | 0,7 | 14,0 | (4,7) |
Net income | 6,3 | (3,3) | (6,6) | (3,3) | (48,6) | 22,4 |
Profit margin | 3,3 % | -1,8 % | -3,5 % | -1,6 % | -24,2 % | 11,3 % |
Weighted # of shares outstanding (m) | 19,9 | 19,9 | 19,8 | 19,7 | 19,6 | 19,6 |
Basic EPS (NOK) | 0,31 | (0,17) | (0,34) | (0,17) | (2,48) | 1,14 |
Diluted EPS (NOK) | 0,28 | (0,17) | (0,34) | (0,17) | (2,48) | 1,11 |
Cash flow items | ||||||
Cash from operating activities | (22,0) | (17,1) | (8,2) | 50,7 | 16,9 | 62,3 |
Investments | (4,2) | (11,3) | (8,4) | (17,1) | (3,7) | (7,3) |
Net changes in cash and cash equi. | (37,2) | (46,7) | 41,3 | 18,2 | 3,9 | 44,9 |
Cash and cash equivalents end of period | 69,3 | 59,6 | 64,8 | 82,4 | 87,5 | 129,0 |
Net interest-bearing debt | 299,0 | 308,7 | 311,0 | 286,6 | 344,5 | 277,9 |
Equity | 105,3 | 100,1 | 101,6 | 92,2 | 95,9 | 101,5 |
Equity ratio | 13,9 % | 13,8 % | 14,3 % | 12,9 % | 12,4 % | 13,5 % |
Number of FTE (Period End) | 822 | 825 | 803 | 753 | 728 | 723 |
Segment overview* | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | Q1 2020 | Q2 2020 |
Revenues | 192,4 | 187,5 | 190,7 | 206,2 | 200,6 | 198,4 |
Managed Services | 136,2 | 133,9 | 130,4 | 153,2 | 142,3 | 137,1 |
Professional Services | 56,1 | 53,7 | 60,3 | 53,0 | 58,3 | 61,3 |
EBIT | 6,5 | 4,4 | 4,8 | (1,6) | 9,5 | 7,4 |
Managed Services | 13,6 | 15,8 | 10,6 | 14,9 | 16,7 | 16,0 |
as % of revenue | 10,0 % | 11,8 % | 8,2 % | 9,7 % | 11,8 % | 11,7 % |
Professional Services | 8,7 | 3,5 | 9,1 | (0,3) | 6,3 | 4,1 |
as % of revenue | 15,5 % | 6,5 % | 15,1 % | -0,6 % | 10,8 % | 6,6 % |
Gr.ovhd & Unallocated | (15,8) | (14,9) | (15,0) | (16,2) | (13,6) | (12,7) |
*Revenue from certain consulting services previously report as part of Managed Services have been moved to Professional Services from 1 | ||||||
January 2020. Business development costs previously included within Group Overhead has been allocated to the business segments from 1 | ||||||
January 2020. Comparable historical information has been updated accordingly. |
25 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
IR contacts:
Hans-Petter Mellerud
CEO hans-petter.mellerud@zalaris.com+47 928 97 276
Gunnar Manum
CFO gunnar.manum@zalaris.com+47 951 79 190
Financial information
Interim report Q3 2020 to be published 29 October 2020
All financial information is published on the Zalaris' website: http://www.zalaris.com/Investor-Relations/
Financial reports can also be ordered at ir@zalaris.com.
Zalaris ASA
PO Box1053 Hoff
0218 Oslo
Norway
26 | Zalaris ASA Interim Report Q2 2020 | www.zalaris.com |
Attachments
- Original document
- Permalink
Disclaimer
Zalaris ASA published this content on 17 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 August 2020 09:55:02 UTC