An annual outlook on financial results
Although we received requests from shareholders to publish the quarterly results and highlight the activity within the quarter, we consider that it is not a relevant presentation considering the specifics of the company. Shareholders who want this information can easily obtain it by subtracting the figures from S1 from the figures presented in this report. They will discover a 30% increase compared to Q3 2019, both in terms of turnover and gross margin, and an improvement of RON 1 million in operating profit.
Instead, we consider the presentation of the results in the ‘last 12 months’ format to be much more relevant, especially given the seasonality of the business focused on Q4, as we showed in the letter. If we analyze the activity of the group at a consolidated level for the last 12 months, the image is very favorable:
|
12 months between October 1, 2019 and |
|
| Revenues from contracts with customers | 119,957,888 |
| Revenues from the provision of services | 33,047,529 |
| Sale of goods | 86,910,358 |
| Cost of sales | (94,642,399) |
| The cost of selling goods / materials | (77,194,055) |
| Cloud services | (4,076,093) |
| Hours – Individual | (13,372,250) |
| Gross margin | 25,315,489 |
| Other incomes | 556,568 |
| Sales / distribution expenses | (7,731,664) |
| Team expenses | (6,634,826) |
| Advertisement | (1,096,838) |
| Administrative costs | (11,850,788) |
| Staff expenditure | (6,841,210) |
| Depreciation (and Rent) | (2,256,145) |
| Operational profit | 6,289,605 |
| Financial Result | (3,473,015) |
| Group activities | (311,630) |
| Gross profit | 2,504,960 |
This presentation sends us the message that, if we do not see any increase in Q4 2020 versus Q4 2019, we will still reach the budget targets approved by the GMS in April 2020. Of course, there is a probability that Q4 2020 will be affected by political decisions related to the Covid-19 pandemic. There is a current of opinion that suspects a new lockdown period, which can have a negative effect on delivery possibilities, but also on customer confidence in the economy. This risk is beyond the company’s control, but even if it materializes, we do not believe it will change the company’s medium- and long-term outlook.
If we analyze the sales pipeline until September 30, taking into account only the opportunities that could close during 2020, we notice that there are sufficient chances to reach the targets. Out of the RON 280 million “in progress”, certainly a large part will be adjusted in size or will be lost, but, looking at the opportunities in advanced stages of negotiation, they amount to almost RON 40 million only to this date.