Financial results Technology Division 

From a financial point of view, the evolution of the Technology Division in 9 months 2020 compared to 2019 shows a 42% increase in sales, much faster in the case of higher value-added services (78%), which generated a higher gross margin, more than triple – almost with RON 7 million more than in the first nine months of 2019. Taking into account the reduction of fixed costs and the increase (as percentage) of variable expenses much smaller than the gross margin, the operating result of the Technology Division is a profit of almost RON 1,5 million, increasing by RON 6.7 million compared to the same period last year. 

	30/Sep/20	30/Sep/19	Evolution
Revenues from contracts with customers	68,357,028	48,154,782	41.95%
Revenues from the provision of services	13,445,828	7,524,848	78.69%
Sale of goods	54,911,200	40,629,934	35.15%
Cost of sales	(58,608,338)	(45,282,729)	29.43%
The cost of selling goods / materials	(48,308,963)	(36,732,069)	31.52%
Cloud services	(3,650,522)	(1,437,522)	153.95%
Hours – Individual	(6,648,853)	(7,113,139)	-6.53%
Gross margin	9,748,691	2,872,053	239.43%
Other incomes	119,786	(147,532)
Sales / distribution expenses	(3,925,394)	(3,306,826	18.71%
Team expenses	(3,567,314)	(3,028,819)	17.78%
Advertisement	(358,079)	(278,007)	28.80%
Administrative costs	(4,460,704)	(4,671,406)	-4.51%
Staff expenditure	(2,539,292)	(2,567,403)	-1.09%
Depreciation (and Rent)	(950,704)	(851,591)	11.64%
Operational profit	1,482,379	(5,253,711)

Increasing spending on goods is natural in the context of increasing turnover. 

The increase in sales expenses has two components: 

• allocating larger marketing budgets – which is due both to the context of the pandemic, but also to the fact that we will slowly change the method of addressing customers, becoming more marketing-oriented versus ‘classical sales’, 

• the increase of the expenses with the sales bonuses, natural taking into account the increase of the additional gross margin generated by the sales team.