Half-Year Report January-June 2023
Tecnotree Corporation Stock Exchange Release 4 Aug 2023 at 9:00 EEST
MAINTAINING GROWTH IN TURBULENT MARKET CONDITIONS
Second quarter (April-June 2023)
- Net sales increased 5.4% to EUR 19.3 (18.3) million.
- Operating result increased 20.4% to EUR 6.2 (5.1) million.
- Net result decreased by 6.3% to EUR 3.7 (4.0) million.
- Cash flow after investments was EUR -0.8 (-2.1) million.
- Earnings per share were EUR 0.01 (0.01)
- Order book at the end of the period stood at EUR 68.4 (72.8) million.
Firs half (January-June 2023)
- Net sales increased 10.2% to EUR 34.8 (31.6) million.
- Operating result increased 37.3% to EUR 9.8 (7.1) million.
- Net result increased by 11.1% to EUR 5.5 (5.0) million.
- Cash flow after investments was EUR -1.2 (-4.2) million.
- Earnings per share were EUR 0.02 (0.02)
| Key figures, MEUR | 4-6/2023 | 4-6/2022 | 1-6/2023 | 1-6/2022 | 1-12/2022 |
| Net sales | 19.3 | 18.3 | 34.8 | 31.6 | 71.6 |
| Operating result | 6.2 | 5.1 | 9.8 | 7.1 | 18.3 |
| Result before taxes | 4.2 | 5.9 | 6.9 | 7.4 | 17.2 |
| Result for the period | 3.7 | 4.0 | 5.5 | 5.0 | 11.6 |
| Earnings per share, basic, EUR | 0.01 | 0.01 | 0.02 | 0.02 | 0.04 |
| Order book | 68.4 | 72.8 | 68.9 | ||
| Cash flow after investments | -0.8 | -2.1 | -1.2 | -4.2 | -4.8 |
| Change in cash and cash equivalents | -0.2 | -2.1 | -1.6 | -3.6 | -5.3 |
| Cash and cash equivalents | 10.7 | 13.9 | 12.3 | ||
| Equity ratio % | 77.4 | 81.7 | 77.1 | ||
| Net gearing % | -4.4 | -18.7 | -9.3 | ||
| Personnel at end of period | 895 | 778 | 857 |
Prospects 2023
Despite significant pressures expected in H2 of 2023 from cost inflation and margin erosions, the company at this stage maintains its current guidance:
- Revenue to be higher by 7-15% compared to 2022
- Operating profit (EBIT) to be higher by 10-20% compared to 2022
- Cash recovery expected to grow by 12-18%
- Cost rationalization by Q4 of 2023 to the tune of 5-7%
From the CEO – Consistent Growth in a Challenging Market
Revenue
In H1, Tecnotree witnessed a continued net sales growth of 10.2% to EUR 34.8 million compared to H1 of 2022 (31.6). This growth was achieved despite the strengthing of the euro against the US dollar. Substantial revenue growth came from the Middle East Region and North America in Q2. This growth was fuelled by ongoing deliveries of our Digital Stack for BSS in Africa and Middle East along with Tecnotree Sensa AI/ML deliveries in Healthcare and Fintech in the United States of America.
Profitability
Tecnotree demonstrated a strong climb in operating result with a 37.3% increase to EUR 9.8 (7.1) million owing to the increased productization and configurability of the stack making deployments and deliveries timely and cost effective. Profitability is also enhanced by annual recurring revenue models of the AI/ML business in the United States. As the revenue increased by 10.2%, opex grew by only 8.2% due to the ongoing cost optimisation plans, resulting in a strong operating result.
Net Result
The net result increased by 11.1% in H1 to EUR 5.5 (5.0) million due to increased revenue and continued focus on Opex reduction. The net result was impacted by a one-time currency devaluation in Nigeria on the cash balances maintained for local operations and the continued hyper-inflationary trends in Argentina.
In H1 of 2023 Tecnotree delivered an earnings per share of EUR 0.02, consistent with last year’s performance for the same period.
Cash Flow
Cash inflow improved by 21.9% to EUR 31.5 million compared to 25.9 in H1 of 2022. The continued effort on collection resulted in a reduction of accounts receivable in H1 of 2023. The net cash balance at the end of H1 is 10.7 million euros and remains at the same levels as Q1 of 2023. The cash balance was impacted negatively by the one-time currency devaluation in Nigeria.
Order Book
At the end of H1 of 2023 Tecnotree’s order book remains healthy at EUR 68.4 million despite challenging market conditions for customers and prospects. The H1 order intake was EUR 32.1 (45.9) million euro. Tecnotree continues to retire its order backlog with strong delivery performance, however new order intake has been muted by customers delaying decisions on capex investmenst for large digital transformations. This has necessitated Tecnotree to invest in R&D initiatives to create alternative revenue streams such as annual recurring revenue and cloud-based subscription models.
In H1 of 2023, Tecnotree added two new Tier-1 logos from North America for the Sensa AI/ML platform in Healthcare and Fintech. Tecnotree also grew its market share of its digital BSS stack in the Middle East and Africa with significant orders from both new and existing customers.
Recognitions
Tecnotree’s Digital BSS, Moments and Sensa platform have been nominated by TM Forum for the prestigious TM Forum Excellence Awards 2023 and Tecnotree has been recognised as a finalist in the Customer Experience category for its implenmentations with MTN.
Tecnotree has been recognized by Gartner’s Market Guide again in Q1 of 2023 for Customer Experience and Management and has been consistently recognized for the same since 2020.
Additionally, for 2023 Tecnotree has been recognized by Gartner’s Market Guide for Revenue Monetization and Management, and has been consistently recognised for the same since 2020.
Tecnotree DiWa wallet achieved PCIDSS (Payment Card Industry Data Security Standard) compliance, which will significantly increase the growth opportunities for its Fintech offering globally.
Tecnotree continues to be among the leading vendors in TM Forum Open APIs certification standards with a 45 APIs certified by the industry standards body, the highest in the internet service community.
Furthermore, Tecnotree Moments has been awarded the best telecom monetization platform by the Government of Dubai at the FTNFT awards in Q1 of 2023.
