Q1 Interim Report 1 January – 31 March 2022
Risk Intelligence A/S (“Risk Intelligence” or "Company") hereby publishes the Q1 Interim Report for the period January - March 2022. The report is available on the Company's investor website (investor.riskintelligence.eu).
Highlights
- Strong continued growth in recurring revenue by 20%
- Net Retention Rate 105%
- Revenue decreased by 7%
- EBITDA Q1 decreased by 141%
- Net profit Q1 decreased by 98%
- Full year guidance for 2022 intact
Reporting period Q1: January 2022 – March 2022
DKK ‘000
|
3,924 | (4,240) | -7% |
|
5,607 | (4,937) | +14% |
|
-1,682 | (-698) | -141% |
|
-2,809 | (-1,560) | -80% |
|
-2,217 | (-1,117) | -98% |
|
-0.20 | (-0.11) | -89% |
Metrics Q1 2022:
DKK ‘000
|
16,264 | (13,740) |
|
2,524 | (1,780) |
|
18% | (15%) |
|
14,828 | (12,314) |
|
2,515 | (1,162) |
|
20% | (10%) |
|
139 | (123) |
|
96.2% | (97.3%) |
|
3.8% | (2.7%) |
|
105% | (101%) |
Guidance 2022:
Unchanged
- Growth: 15 - 25%
- Revenue: 21.5M - 23.5M DKK
- EBITDA: Negative
- Net result: Negative
- Net cash-flow: Positive
CEO Hans Tino Hansen
2022's first quarter has brought a wide range of developments and outcomes due to the war in Ukraine. Not only for Risk Intelligence, but for everyone globally - and in and around Europe in particular. In addition, the Russian aggression in Ukraine has aggravated existing supply chain challenges and further increased inflation, something that will have an impact on all businesses and consumers.
Risk Intelligence anticipated already in January that the risk of war was increasing, and that the probability for war had become higher than for peace. Hence, as the war broke out on the 24 of February, we were fully prepared to support our clients. Around 100 commercial vessels were caught in Ukrainian ports when the invasion started, and their crews faced increasing difficulty getting out of Ukraine. Our team facilitated and coordinated the evacuation of crews for several clients and non-clients alike in cooperation with a British response company carrying out the actual evacuation. The work from our side was done without charge, as it was more important to save lives than to start discussing renumeration.
In March, Risk Intelligence launched a weekly intelligence report, the Northern Black Sea Report, which provides an overview of the current situation in the northern Black Sea and the ports in Ukraine, Russia and in Romania. This report has been a success and 20% of the proceeds from the report will be donated to support Ukraine and victims of the war, in addition to the 25,000 DKK already donated to The International Red Cross.
With the current outlook, it is our assessment that the war in Ukraine will continue for a considerable time, which means the impact on shipping and supply chains - especially on wheat exports to Africa and Asia - will continue, and possibly worsen. At the same time, Europe is in the process of switching from Russian gas to LNG, which provides increased business for our gas clients, but also brings increased vulnerability and risk. Our role is to continue to advice our clients on how to address the security implications of the increasing crisis.
The quarter ended with a satisfactory 20% increase in Annual Recurring Revenue (ARR) from the Risk Intelligence System and from intelligence reports. The Net Retention Ratio (NRR) reached 105%, including the churn of 3.8%, meaning that the clients delivered net 5% more revenue than in Q1 2021. This mainly from upselling and price increases. It is the first time that we publish the NRR in combination with the churn, as we believe that churn should be seen as a function of the total increase in revenue rather than an isolated metric. The third important metric, the Average Recurring Revenue Per Unit (ARPU), also increased to 139K DKK per client.
Q1 unfortunately also saw an isolated drop in total revenue of 7%, mainly due to a 54% decrease in revenue from Advisory Services. Traditionally, Risk Intelligence have 1-2 large consulting projects in every calendar year, in addition to a wide range of small and medium projects. Last year's major project fell in Q1, while this year we have one scheduled for later quarters, which explains the comparative drop. Costs have been increasing by 14% compared to Q1 2021, mainly due to a combination of higher spending on sales and marketing than in 2021, as well as the costs of getting back to face-to-face operations with full functioning offices.
Despite the first quarter not performing quite as anticipated in some areas, we maintain our full year guidance, as we have full confidence that we will be able to deliver growth in revenue during 2022.
Notwithstanding the global situation; war in Ukraine, supply chain challenges, growing inflation, and volatility in the financial markets, we successfully increased our most important financial figures, the ARR and net retention in this first quarter. At the same time, I believe we succeeded in our two most important core business areas: Saving the lives of shipping crews in need and helping to reduce the risk of exposure to the war for our clients.
Video presentation:
Presentation (in English) with NyhetsByrån Direkt will be available from about 15.00, 18 May, on our Investor presentations page.
For more information on services and the System:
Please watch our corporate video: Knowing Risk
