DIRECTORS REPORT
SMB remained the largest revenue contributor and accounted for 34,9 per cent of revenue, followed by Enterprise at 33,3 per cent, Custom Solutions at 18,4 per cent, Commerce Solutions at 7,9 per cent while CIS, IT & Group HQ constitute 5,5 per cent of Group Revenue. Earnings before interest, tax, depreciation and amortization (EBITDA) increased by 26,6 per cent to NOK 4 061,4 million (3 207,5). SMB accounted for 45,3 per cent of total EBITDA, followed by Enterprise at 26,7 per cent, Custom Solutions at 16,2 per cent, Commerce Solutions at 8,0 per cent and CIS, IT & Group HQ accounted for 3,8% of total EBITDA. Depreciation and amortization amounted to NOK 2 414,4 million in 2019 (1 726,1), with the increase primarily explained by acquisitions adding to the asset base. EBIT increased by 10,7 per cent to NOK 1 647,0 million (1 481,4). Net financial items increased as a result of increased interest due to expanded debt facilities, and profit before tax increased by 13,1 per cent to NOK 1 262,4 million (1 115,9). Taxes amounted to NOK 284,9 million (195,9), generating a net income from continuing operations of 977,5 million (920,0). Profit for the year from continuing and discontinued operations combined was 990,7m (1 580,5), with the sale of the Hosting and Retail divisions in 2018 explaining the decrease. These divisions were sold as part of a strategic plan to increase the focus on the core software
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business in Visma. Consequently, the net profit after tax and minority interests was 993,7m (1 578,2). In the Board of Directors opinion, the financial statements for the year present fairly the Group’s financial position and results for 2019. In 2019, the parent company Visma AS had a profit of NOK 867,1 million (1 124,9). PROPOSED ALLOCATION OF THE PROFIT FOR THE YEAR (NOK 1,000) Transferred to retained earnings
867,1
Total allocated
867,1
CASH FLOW AND BALANCE SHEET Visma generated a strong cash flow of NOK 3 610,5 million from continuing operations in 2019 (3 046,7). The Board of Directors deems the cash flow from operations to be satisfactory, supported by sound financial management and improvements in working capital. Cash flow from investing activities was NOK -4 884,4 million (-4 278,1). In 2019 NOK -4 803,8 million was related to acquisitions (-4 901,4). Cash flow from financing activities amounted to NOK 2 759,1 million (2 741,8). Cash and cash equivalents increased to NOK 6 571,9 million (5 148,0), which the Board of Directors considers to be sufficient given the current and expected activity level. Total assets increased to NOK 37 634,4 million at the end of 2019 (31 039,4), mostly related to businesses acquired
during the year. The majority share of the equity increased to NOK 13 774,0 million at the end of 2019 (9 860,5), reflecting capital increases, the profit for the year and payment of group contribution. The equity ratio increased to 36,7 per cent (31,8). Accounts receivables totaled NOK 1 902,5 million at 31 December 2019 (1 868,0). Customers’ average credit period was 34 days towards the end of 2019. Visma has made provisions of 2,1 percent of accounts receivable (excluding VAT), to cover potential losses on doubtful receivable. The allocation is close to trade receivables older than 180 days. The company closely monitors accounts receivable, and the provision is considered adequate given that the company’s average credit period is below the IT-industry average. REVIEW OF THE BUSINESS AREAS The SMB division delivers ERP, CRM, HR/payroll, and e-commerce software to small and medium-sized businesses in Norway, Sweden, Finland, Denmark, the Netherlands, Estonia and Poland. In 2019, Visma SMB further strengthened its position as leading SaaS supplier with strong growth in both revenue and number of new subscriptions. Visma’s entry level ERP solutions including Tripletex, Dinero, SpeedLedger, e-conomic and eAccounting experienced strong organic growth in 2019 and ended the year with 359 000 customer contracts. The number of customer contracts on Visma.net Financials, the international cloud based ERP targeting medium to large customers, also continued its strong momentum in the market. 70% of the customer contracts in the division were for cloud prod-