- Net sales in the period amounted to MSEK 144 (199) and Net sales for the fourth quarter were MSEK 33 (41).
- The Gross margin for the period was 68% (72) and Gross margin for the fourth quarter was 61 (76)%. Gross profit for the period was MSEK 97 (144) and Gross profit for the fourth quarter was MSEK 20 (29).
- Earnings before depreciations and amortizations (EBITDA) for the period was MSEK -79 (-26) and EBITDA for the fourth quarter was MSEK -16 (-18).
- The Result after tax for the period was MSEK -168 (-45) including a goodwill write-down of MSEK 69 and Result after tax for the fourth quarter was MSEK -93 (-24) in including a goodwill write-down of MSEK 69.
- Earnings per share before and after dilution for the period was SEK -1.03 (-0.33) and for the fourth quarter SEK -0.42 (-0.17).
- Cash flow during the period was MSEK 2 (-18) and Cash flow for the fourth quarter was MSEK 3 (-5). Cash flow from operating activities before changes in working capital in the period was MSEK -88 (-28) and Cash from operating activities before changes in working capital for the fourth quarter was MSEK -19 (-19). Cash flow from financing activities during the period was MSEK 98 (3) and Cash flow from financing activities during the fourth quarter was MSEK 42 (0).
Comments from the CEO
Revenues in Q4 were 33.3 MSEK compared to 33.4 MSEK in Q3. Gross margin was 61% compared to 73% in Q3. Operating expenses were 36.3 MSEK in Q4 compared to 44.0 MSEK in Q3. We reached our OPEX target following the re-organization in Sweden. EBITDA was -16.0 MSEK compared to -19.6 MSEK in Q3. Cash flow for the quarter was 3.4 MSEK, including 54 MSEK of proceeds from the 65 MSEK rights offering in December. Remaining 11 MSEK gross proceeds from the rights offering was received after year end close. The bridge loan entered into in July from Ewig Industries of 13,8 was repaid in December. Included in working capital at year end was a large inventory of 31,600 DP 201 digital pens for business solutions.
In the fourth quarter we decided to write down the goodwill, MSEK 69, related to the purchase of 30% of the shares in Anoto AB from Ericson in 2001. The write down was made following changes in the operations leading to weaker cash flows from the cash generating unit.
Sales in Q4 were disappointing and below expectations. Despite our significant efforts to focus our business on markets and market segments where paper is used for legal, compliance, economic or work habit reasons we have not been able to compensate for the loss of partners in our eco-system. Although our strategy has been to work more closely with larger partners many small partners contributed to sales in the past. Tablet solutions are capturing an increasing market share in developed markets for structured data input and is pushed by all major IT companies. Therefore we have concentrated our efforts to the UK where we have a stronger direct presence especially within healthcare for providing solutions to significantly improve efficiency, reduce costs whilst freeing more time to care for the patients. On December 9th the Nurse Tech Fund was released for NHS trusts to apply for a first tranche of GBP 30 million out of the total GBP 100 million plan. Deadline for trusts to submit their applications was set to January 15th, 2014. The second tranche of GBP 70 million will be released after April 1st, 2014. The announcement slowed down sales in the UK in Q4. However based upon the number of applicants and the increase in activity to access funds from the program we expect a significant positive effect in Q1 2014.
In other markets we continue to work more closely with select partners, including new partners and larger companies to address the need to rationalize paperwork without change in work practice. As an example we delivered a solution together with partner Habitual Data for 500 users for a national police force in Latin America.
Our investments together with OEM partners within business segments education, voting and screens did still not yet materialize into significant revenues although we saw several signals of an increasing positive momentum. TStudy is building a back log of orders for the Chinese education market which is now expected to materialize in 2014. Panasonic started pre-marketing of the Toughpad 4K UT-MB5 with Anoto Touch Pen. The product will initially be marketed to customers within B2B automotive, healthcare, construction and design. Livescribe launched Livescribe 3 and received a large number of positive reviews resulting in demand exceeding supply in the quarter. The product is sold in Apple stores world- wide as well as online and select retail stores. Our partner within voting did not yet announce a date for release of their first applications which we expect will happen during 2014.
OUTLOOK
We are in the process of consolidating our two operating units in the UK and to capitalize on synergies. We expect business to improve in the first quarter based upon NHS incentives in the UK plus increasing business from OEM partners. After the release of Panasonic’s 20 inch tablet with embedded digital writing functionality we see an increasing interest from other companies to evaluate Anoto’s technology for screens. We do see a large potential to expand our business with leading screen manufacturers based upon our ability to combine high accuracy and performance with low cost and easier integration, both for smaller and larger screens. The financial situation is still challenging and we continue our efforts to improve efficiency with limited resources and improve working capital.
Stein Revelsby
CEO
Anoto Group AB may be required to disclose the information provided herein pursuant to the Securities Markets Act. The information was submitted for publication at 08.50 on February 6, 2014.
A webcast of the Q4 report will be available from 09.00 on February 6 and a Q&A session via audiocast will be held at 11.00 the same day. For more information, see www.anoto.com/investors.
Calendar 2014
Annual report 18 April, 2014
Q1 report 9 May, 2014
AGM 16 May, 2014
For more information please contact:
Stein Revelsby, CEO
Phone: +46 (0)733 45 12 05
or
Dan Wahrenberg, CFO
Phone: +46 (0)733 45 10 19
Anoto Group AB (publ.),
Corp. Id. No. 556532-3929
Box 4106,
SE-227 22 Lund, Sweden
Phone: +46 46 540 12 00
www.anoto.com
