Careium reports first quarter results 2022

The quarter in summary

• Careium’s net sales amounted to SEK 178.5 million (138.0), an increase of 29.4 percent. Service sales amounted to 139.4 million (112.6) an increase of 23.8 percent. Product sales amounted to 39.1 million (25.4) an increase of 54.2 percent.
• Gross margin amounted to 39.2 percent (41,9).
• Adjusted operating profit (EBIT) amounted to SEK -3.4 million (5.5) excluding restructuring costs of SEK 20.9 million corresponding to an operating margin of -1.9 percent (4.0). In addition, operating profit has been charged with non-recurring costs of SEK 6.9 million. Including restructuring costs EBIT amounted to SEK -24.3 million (5.2) corresponding to an operating margin of -13.6 percent (3.8).
• Free cash flow before acquisition of SEK 4.5 million (-22.5).
• Earnings per share amounted to -0.83 SEK (0.16)

CEO's comment

We started the year with a progressive, positive sales development with sales amounting to SEK 178.5 million. Sales during the previous quarter were the highest in Careium's history and we are pleased to announce that the first quarter of the year breaks new sales records. The work to increase organic growth has shown results and amounted to 18.4 percent in the quarter. We have seen a good development in all our markets with increased sales in both services and products.

In the Nordic region, we continue to make great progress, where we have won and implemented a number of new agreements during the quarter. In the UK, we had strong product sales during the quarter, and we see an increased demand for digital social alarms in the market, completely in line with the transformation the market is undergoing.

The gross margin in the quarter amounted to 39.2 percent, a good margin under the conditions and the situation we are in. During the quarter, we had continued challenges in the supply chain with high freight and component costs. In addition, our markets have continued to be affected by the pandemic with higher costs in the service delivery due to high sickness absence in our alarm receiving centres. Despite this we have maintained quality in our service delivery.

During the quarter, we launched several new products, including smart detectors for a safer environment in the home. We have also released our welfare hub Eliza S, which we already rolled out to our first customers during the quarter. Eliza S is a slim version of Careium's flagship - the digital welfare hub Eliza. It is developed and built on the same powerful platform and is compatible with sensors for todays and future technology enabled care. I am proud to be able to present this product, which is both future-proof and meets the high requirements in technology enabled care. We also have the version for external customers of our platform ready, which we are now starting to bring to market.

During the previous quarter we communicated about the challenges in the UK and the restructuring we have initiated in the region. The restructuring aims to complete the integration of the company's acquisitions and create long-term profitability. During the quarter, we carried out a number of activities where we consolidated our offices from three to two in order to be able to work on a more integrated basis. The merger has required approximately SEK 5.5m in restructuring costs which will affect the result for the quarter. In addition to this, we have strengthened the management team in the UK and recruited a new sales manager and a new operations manager. We also continued with the implementation of a common system for our service delivery. The restructuring of UK is expected to provide a reinforcement of the results with about SEK 35–40 million yearly and the estimated transformation costs during 2022 amounts to SEK 15–20 million, of which 12.4 million has burdened the first quarter. The remaining costs are expected to be taken during Q2-Q3. In connection with the restructuring, we conducted a review of overdue accounts receivable where we assess that the risk of customer losses is high. The audit resulted in a write-down of accounts receivable in the region of approximately SEK 15 million.

We are, of course, deeply concerned about the war in Ukraine and our thoughts are with the people affected by the conflict and the resultant humanitarian impact. We as a company have donated to UNHCR to help provide life-saving protection to families who have been forced to flee their homes. We do not see any direct effects on Careium's operations but continue to follow developments closely.

We are now leaving our first quarter as an independent company behind us, where we have taken further steps towards becoming a market leader in welfare technology in Europe. During the quarter, we published our annual and sustainability report where you can read more about our work to create safer, innovative and better care.

Webcast
A webcast conference call will be held Friday 29 April at 10.00 am (CEST) when President and CEO Carl- Johan Zetterberg Boudrie will present the report. The webcast is accessed at https://tv.streamfabriken.com/careium-q1-2022. The presentation material is available on Careium’s financial website https://www.careium.com/sv-se/investerare.
 

Telephone numbers:
Sweden: +46 8 50 55 83 56
United Kingdom: +44 33 33 00 92 60
USA: +1 63 19 13 14 22
PIN: 15597708#

This information is information that Careium is obliged to disclose in accordance with the EU Market Abuse Regulation. The information was submitted for publication on Friday, April 29, 2022, at the time of the above contact persons, 8.00 (CEST).