Please look at our disclaimer. Good morning. Welcome to our Q1 presentation for Sikri. My name is Nicolay Moulin. I am the CEO in Sikri. With me today presenting, we have our CFO, Camilla. Please say a couple of words about yourself. Good morning. I'm very happy to be here today to present the Q1 results with you, Nicolay. Thank you. If you have any questions during our presentation, we will be happy to answer them after the presentation. Please send questions to the email address displayed on the screen now, er@sikri.no. Now to some business updates. As most of you know, Sikri is a software company delivering software to the Nordic market. Our business model is to sign long-term licensing, maintenance, and support agreements, as well as providing consulting services in implementing our software to the customer's needs. A growing part of our revenue comes from Software as a Service, reported as subscriptions fee, which includes licensing and maintenance. This model allows us to build a strong Annual Recurring Revenue base. This quarter, as the last, has been a busy and eventful period for us. We are almost reaching our goal for organic growth, delivering a 14.4% growth for Q1. We're still achieving a high win rate. Even though there are fewer bids this quarter, we're still delivering a 66% win rate, and we are glad to see that we are reaching over 70% win rate on the election frame agreement signed in Q4 2020. We are also experienced increased pull towards cloud solutions in public sector. We now have over 80 clients on our Microsoft Cloud solution in Norway. Of course, post Q1, the acquisition of Ambita, putting us on the map, creating a Nordic software powerhouse in PropTech, analytics, data, and public administration software. As most of you probably know, we acquired Ambita from the Ministry of Trade, Industry and Fisheries, announced the 19th of April. This is for us an important building block and on our exciting journey in building a Nordic software powerhouse. Data, as you all know, an increasingly important building block in creating new services for both private and public sector, and us as citizens and consumers. It was exciting to read Menon's financial report stating that in Norway today, the data economy is representing NOK 150 billion and is employing several thousand people. The numbers are expected to be doubled in the coming years. Our clear ambition is to build a leading ecosystem for public administration, PropTech, data, and analytics within the Nordics. Based on existing market positions, we will develop new services creating sustainable values. The Nordic countries all have a strong public sector. To meet the economic and demographic challenges ahead, cooperation between private and public sectors and citizens is key. Ambita services are used with many areas during the entire life cycle of property. Data. Everything starts with data. Insight and analytics is used to create wide span of services for everything from real estate agency and construction companies to banks and insurance companies. We believe with Sikri's strong established position in public sector, that cross-selling will be substantial for services already in place in Ambita organization. Together, these companies will represent a strong Nordic innovation center, uniquely positioned to offer the public sector, private businesses, and citizens better services. Everyone is talking about how public sector needs to be more efficient and embrace IT to a larger degree. I also believe this applies to private sector and not least us as consumers and citizens. We believe in the new organization, we will become a key player to make data flow better and more efficient, making society as a whole more productive and efficient. We want with our M&A strategy to take a position with the goal of consolidating in a highly fragmented universe of software players in the Nordics. We believe that in the few acquisitions we already have done, we have shown that we as an organization are delivering according to plan and will deliver on our aspirations. We have our post Q1 acquisition, taken an important step in reaching the goal of 1 billion NOK in revenue. It doesn't quite work like that for us. With the Ambita acquisition, we have just created a new baseline. We will still have the ambition to deliver a 15%-25% organic growth and an M&A growth of 25% year-over-year. Our long-term ambition is building the leading Nordic ecosystem for public administration, PropTech, data, and analytics. Our combined revenue for 2020 was 712 million NOK, with approximately 68% recurring and recurring like revenue. We still believe that we will, over time, reach the goal of a 30% EBITDA, but we see that for the moment, we still have some work to do to get there. With the large numbers of customers and over 150 developers in the organization, and the enormous amount of data, we strongly believe we'll be able to increase revenue without increasing cost base proportionally. As mentioned, there were fewer case management bids in the market in Q1. We have still in Q1 a win rate of 66%. As announced last quarter, Sikri won the frame agreement, one out of three public bids for the Norwegian Directorate of Elections late 2020. Here we are showing an even stronger win rate. For the first election, Sikri have a win rate of over 70%, giving us over 110 new contracts. This revenue will not be recognized as an income before Q3, after the actual election in September. Sikri has also, based on the software from the acquisition of Sureway AS, built election-specific solutions with risk analysis and preparedness required to be done by the municipalities by the Norwegian Directorate of Elections. As for everyone, the past year has been challenging and many of us are tired of working from home, or in the cabin, in the bedroom, or in the broom closet without day-to-day interaction with our colleagues and customers. Sikri has managed to adapt to the said situation fairly well. Now we are looking forward and are shaping our post-COVID strategy. We have started to collect data from each employees on their preference on returning to the offices, both for short-terms and long-term. We believe these data will enable us to set the right strategy, policy, and plan for the full hybrid office solution. Recent research has shown that success in this area will represent a competitive advantage, both in the productivity and in attracting and keeping employees. With that, I would like to give the floor over to Camilla on some financial updates. Camilla, please. Thank you, Nicolay. Before we present the Q1 results, I will start with a few comments on 2020. As some of you might have noticed, we actually made our transition from the Norwegian accounting standards, NGAAP, to IFRS already for our 2020 financial statements. The transformation to IFRS luckily resulted in insignificant differences to our financial reporting, where the changes are threefold. Firstly, we have an increase in personnel costs of about NOK 1 million due to the valuation of bonus shares granted under the 2020 ESPP program. Secondly, we have an increase in acquisition costs. Under NGAAP, this is capitalized, but these are offset somewhat by reduced leasing costs. Finally, depreciation costs are reduced by no longer amortizing goodwill, increased by PPA reallocation, and increased also by leasing. No changes to revenue reporting were necessary, and that is very important to state. The balance sheet was impacted by the leasing commitment and corresponding right- of- use assets, and also the changes in goodwill and PPA reallocation, as I mentioned. Overall, the IFRS transition was not a huge impact for our numbers. The transition is important because it's a confirmation of our ambition to apply for a main listing at Oslo Børs within a horizon of about one year. This is a step-by-step process that we will be working on throughout 2021, made easier for now by the small changes it will imply in our reporting. As we now have acquired Ambita and their financials are currently being reported according to Norwegian accounting standards, the next step in the process will be to evaluate the impact it will have for their figures when we consolidate them into Sikri Group during Q2. To say something about the Q1 results. We reported revenue for Q1 of 57.2 million NOK, which in pure pro forma terms represents year-over-year growth of 9.9%. However, normalizing for a one-off in 2020, which should have been phased over the year, and the difference in Easter vacation between the quarters, which does impact us, the real operational underlying growth is 14.4%, almost in line with our ambitions. As Nicolay mentioned, our win rate is still high, which is reflected in higher consulting revenue for Q1 with the implementation of new contracts. License sales declined a bit due to more clients choosing cloud-based solutions instead of a traditional licensing model. This is in line with our strategy. The next step. Sikri is still delivering strong profitability with an adjusted EBITDA for Q1 of 15.7 million NOK, comparable to 14.2 million NOK in the same period last year. This is despite Easter vacation, which is not here adjusted for between the two quarters. We have grown in FTEs in our establishment year. We are able to more than offset increased cost through the increase in revenue. One of our most important KPIs, as stated before, is annual recurring revenue, which we were able to improve quarter by quarter in 2020, both due to acquisitions and organically through new contracts won. We had some additions to ARR in Q1. Also, we had a churn of less than 1% and an impact in the overlap in the transition between old and new contracts. Our win rate is still high. It takes time to build up the full annual recurring revenue from the contracts that we have won. Due to wins in end of 2020 and also in Q1, we expect further improvement in annual recurring revenue in H2 this year. Now if we look at the full P&L, gross margin, you will notice, is lower than the same period last year, but that is due to reclassification of cloud platform costs to COGS. Personnel costs, as I mentioned, have increased due to the growth in FTEs, while other OPEX was impacted by some one-offs. It's important to note the capitalization of development costs was approximately 7% of revenue in Q1 at NOK 4.2 million, while the total for 2020 was at 10% of revenue. Our newly acquired company, Ambita, although we did not own them in Q1, we are very pleased that they have delivered a strong Q1 with a revenue growth of 12% and an EBITDA of 25 million NOK for Q1, representing an EBITDA margin of 17.6%. This is a very positive development quarter-over-quarter. We are pleased with that and do believe that the combined companies with a broader reach can continue to produce strong financial results. Quickly through the balance sheets. Non-current assets are stable from Q4, only impacted by a small reduction in intangible assets due to less capitalization than depreciation, in line with what I mentioned in the P&L. The increase in current assets is mainly an increase in cash from Q4 to Q1 of around 50 million NOK due to the yearly invoicing of approximately 60% of our customers in January. This is mirrored in current liabilities, where contract liabilities have increased by approximately NOK 50 million as well. Non-current liabilities decreased due to the semi-annual payment of NOK 7.5 million on our loans. We end the quarter with an equity ratio of 51% and again, no net interest-bearing debt as of March 31st. That concludes the presentation of our financials. Nicolay, should we open for some questions? Yes, please. I'm not sure if there are any questions at the moment. Not that I see. Let's have a quick look. We actually do not have any questions right now. No. We don't have any questions, but I'm eager to answer questions afterwards, please use the email address at ir@sikri.no to send questions or book one-on-one meetings with Camilla and me. We're more than happy to discuss things that haven't been presented clearly enough. With that, I would like to thank you everyone for listening in, and have a great day. Thank you very much. Thank you very much.
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