Nepa AB (publ): GROSS PROFIT GROWTH OF 19 PERCENT, IMPROVED EBIT

FIRST QUARTER, JANUARY – MARCH 2019 

• Net sales increased by 15.1% to MSEK 66.3 (57.6)
• Gross profit increased by 19.1% to MSEK 50.9 (42.7)
• EBIT was MSEK -3.3 (-5.1)
• Earnings after tax was MSEK -3.6 (-5.7)
• Earnings per share was, basic SEK -0.49 (-0.79), diluted SEK -0.49 (-0.78)

IMPORTANT EVENTS 

DURING THE PERIOD

• Nepa US start to work with Louisville City Football Club and Forward Madison F.C.

AFTER THE PERIOD ENDED

• Nepa Sweden starts to work with NENT and Storytel as CX subscription clients.
• Nepa forms partnership with Touch-A-Prize, resulting in increased sales capabilities and strengthened market offering by access to technology that allows Nepa to identify visitors at, for example, events and sports arenas, regardless of who bought the ticket.

A WORD FROM OUR CEO 

As we close Q1 2019, we celebrate Nepa’s 52nd consecutive quarter of increased sales and gross profit growth. Gross profit, defined as net sales less costs for data that we purchase on behalf of clients, increased by 19 percent. EBIT improved by MSEK 1.7 to MSEK -3.3, even as we continue to accelerate our investments in product development and growing our US business. Personnel costs increased 13 percent, most of the increase driven by investments in R&D and marketing staff. We are making these investments to improve our product offering and increase our sales capability. Gross profit growth exceeding personnel costs increase is evidence of our commitment to scalability.

We saw developments in each of our largest market segments:

1) Sweden

Sweden had a strong first quarter, with solid growth and increased profitability. Nepa continues to lead the market for optimizing marketing investments and customer experience – creating inbound demand for our products and services. Our own continuous customer experience measurements study demonstrates the strength of our client relationships as well. We proudly welcomed many new CX subscription clients in Q1, including NENT and Storytel, which demonstrate the value of our offer in different verticals.

2) UK and Finland

Our established international markets UK and Finland both posted profitable growth in Q1. Nepa UK grew gross profit by 88 percent while increasing profitability by adding new clients and expanding existing relationships. The uncertainty around Brexit has not had any material effect on Nepa UK and we do not see that it will, regardless of the outcome from the current negotiations. 

3) USA

Nepa US added several new clients in the first quarter of 2019 – including multi-year agreements with both a global retailer and a travel & hospitality company. The Nepa US pipeline grew strongly in Q1 as a result of focused marketing activity, increased marketing investments and further growth in our sales team. We see these as indicators that we are on our way to establishing Nepa on a solid foundation in the US market.

Fredrik Östgren
CEO

Fredrik Östgren
CEO
Maria Skolgata 83 118 53
Stockholm, Sweden
+46 733 345 069
fredrik.ostgren@nepa.com

P-O Westerlund
Deputy CEO and CFO
Maria Skolgata 83 118 53
Stockholm, Sweden+46 706 404 824
p-o.westerlund@nepa.com

This is a translation of the Swedish interim report. If there should be any discrepancies, the Swedish language version governs. The Swedish version is information that Nepa AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08:00 CET on May 21, 2019.