Strong growth in product revenue
JANUARY–MARCH 2012
- License revenue amounted to SKr 83 million (Q1 '11: SKr 74 million), an increase of 11 percent currency adjusted.
- Maintenance revenue was SKr 222 million (Q1 '11: SKr 196 million), an improvement of 12 percent currency adjusted.
- Consulting revenue amounted to SKr 335 million (Q1 '11: SKr 335 million), a decrease of 1 percent currency adjusted.
- Net revenue was SKr 643 million (Q1 '11: SKr 607 million), an improvement of 5 percent currency adjusted.
- EBIT amounted to SKr 12 million (Q1 '11: SKr 10 million). Cash flow after investments was SKr 94 million (Q1 '11: SKr 43 million).
- Earnings per share after full dilution grew by 53 percent and amounted to SKr 0.23 (Q1 '11: SKr 0.15).
OUTLOOK
IFS expects strong organic license growth and improved EBIT in 2012.
Strong growth in product revenue
The first quarter, which is seasonally quiet, saw us performing strongly with a currency-adjusted growth in license sales of 11 percent. This growth has come from our target markets where we continue to strengthen our market position. With the steady growth in maintenance revenue resulting from the ever-increasing customer base, our overall product revenue grew by 11 percent on a currency-adjusted basis, thereof 3 percentage points was related to the recent acquisition in Brazil.
Despite the continued uncertainty in the financial markets we are seeing our sales pipeline growing at a higher rate compared to the same period last year. This can be attributed to the fact that IFS targets sectors—for example oil & gas, EPCI, infrastructure—are less affected by the economic volatility.
We have an excellent opportunity to develop IFS organically by building upon our strong position in certain target markets and geographies. To maximize this potential, we have continued to increase our investment in sales and marketing. EBIT for quarter one still increased to SKr 12 million (Q1 '11: SKr 10 million).
During 2012 we will continue to pursue our previously communicated M&A strategy. The most recent acquisition of our partner in Brazil, transacted in December 2011, is now largely integrated into the IFS Group and we are now seeing our pipeline in Latin America increasing.
The outlook for the software market in general remains cautiously positive and industry analysts such as Gartner forecast the enterprise application market to grow in the region of 6–7 percent in 2012.
Our target for the full year remains unchanged, as we expect yet another year with strong organic growth in license revenue and an improved EBIT.
Alastair Sorbie
President and CEO