CYVIZ QUARTERLY REPORT
Q1 2024
Key figures
- EBITDA of NOK 5.2 million in Q1, up 89.2% compared to Q1 2023
- Gross profit of NOK 71.6 million, a growth of 8.9% compared to Q1 2023
- Operating cash flow of NOK 33.3 million compared to NOK -7.1 million in Q1 2023
- Revenue of NOK 106.6 million, a decline of 22.2% compared to Q1 2023
- Order intake of NOK 91.4 million, down 42.4% compared to Q1 2023
- Gross margin and revenues affected by a temporary skew in the mix of shipped goods.
Key events
- Awarded a 2-year purchase frame agreement with a central electricity company in Saudi Arabia.
- Signed an order for advanced meeting room solutions with Equinor (Aberdeen).
- Secured a large multipurpose arena order with a new customer, SWISS International Airlines.
- Secured an order for a high-impact boardroom & event space upgrade for a Fortune Global 500 company in the U.S.
- Entered into a global strategic alliance partnership with IBM X-Force for advanced cybersecurity simulation centers (4 deals to date).
- Revolving Credit Facility (RCF) limit increased from NOK 49.5 million to NOK 60.0 million, aligning with company expansion.
CEO comment
Continued focus on improving profitability.
Q1 2024 continued our commitment to enhancing profitability. As commented in the previous quarterly presentation, Q1 was anticipated to be a softer quarter on order intake and revenue, driven by receiving a larger portion of the Aker BP in late December 2023. This has led to less shipping of higher revenue items and more of our own products and services in Q1, providing a soft quarter measured by revenue but a strong quarter measured by gross profit and EBITDA.
Throughout the quarter, our primary objectives remained twofold: maintaining a sharp focus on enhancing profitability and fortifying our pipeline for sustained growth throughout the year. With our underlying operational business running efficiently, we anticipate growth moving from Q1 in order intake, revenue, and EBITDA. This anticipated growth in performance is driven by higher activity levels across all markets.
We've experienced a significant rise in customer engagement, with an increasing number opting to sign frame agreements with Cyviz. These agreements empower customers to procure our solutions directly from us. This strengthens our relationships with key clients and lays the foundation for a more predictable and sustainable business model.
Among the strategic orders we secured in Q1 is a significant order from a central electricity company in the Middle East as part of a newly signed frame agreement, proving our position within the region. Additionally, our ongoing partnership based on the frame agreement signed in late December 2023 with Aker BP has resulted in new orders. Coupled with the introduction of Equinor as a new customer in Q1, this further solidifies our position as a trusted technology provider in the energy sector. Furthermore, Cyviz' selection by SWISS International Airlines for the Collab-Hub project underscores our reputation for excellence in delivering "Next Level Collaboration".
As we reflect on the achievements of Q1 2024, we remain committed to driving profitability, fostering strategic partnerships, and delivering innovative solutions to our global customers.
Financial review
Financial highlights (NOK million) | Q1 2024 | Q1 2023 | YTD 2024 | LTM 2024 |
Total revenue | 106.6 | 137.0 | 106.5 | 555.0 |
Gross profit1 | 71.6 | 65.8 | 71.6 | 294.8 |
Gross margin | 67.2% | 48.0% | 67,2% | 53.1% |
EBITDA2 | 5.2 | 2.7 | 5.2 | 30.3 |
EBITDA margin | 4.8% | 2.0% | 4.8% | 5.5% |
Cashflow from operations | 33.3 | (7.1) | 33.3 | 28.9 |
Cash and cash equivalents | - | - | - | - |
Net interest-bearing debt (-) / deposits (+) | (9.4) | (8.5) | (9.4) | (9.4) |
Equity-ratio | 41.3% | 36.6% | 41.3% | 41.3% |
Order intake | 91.4 | 158.6 | 91.4 | 690.0 |
Order backlog | 428.3 | 301.5 | 428.3 | 428.3 |
Book-to- bill ratio3 | 0.9 | 1.2 | 0.9 | 1.2 |
FTE's4 | 155 | 154 | 153 | 154 |
- Gross profit is defined as revenues less cost of materials, including subcontractor costs
- EBITDA is earnings before depreciation, amortization, interests, and tax.
- Book-to-billratio is order intake in the period divided by revenue in the same period
4Full-time equivalent (FTE) is a measurement unit that indicates an employed person's workload. An FTE of 1.0 is equivalent to a full-time worker
Revenue and gross profit
Cyviz delivered revenue of NOK 106.6 million in Q1, down NOK 30.4 million (22.2%) compared to Q1 2023. Gross profit is at the same time up from NOK 65.8 million (48.0% to NOK 71.6 million (67.2%).
The reduction in revenue is more than offset by a mix of shipped goods with a larger share of higher-margin items. The mix shift is driven by a larger than usual share of internally developed software, hardware, and services, which are characterized by lower item prices but higher gross margins. The skew in the mix of shipped goods is explained by large projects delivered over a longer period, where such temporary differences become more pronounced as they are not contained within a single reporting period. The gross margin in both Q4 and Q1 was higher than normal for this reason.
As projected by order intake in Q4, revenues were overweight of European origin in Q1.
Order intake and order backlog
Cyviz' order intake reached NOK 91.4 million in Q1, down NOK 67 million (42%) compared to Q1 2023. As outlined in the Q4 presentation, bookings and backlog build-up is typically skewed to the latter half of the year. This pattern was amplified in 2023/24 due to a higher-than-usual intake of orders in Q4-23, which, as expected, has impacted Q1-24.
On a twelve-month rolling basis, Cyviz has booked new deals totaling NOK 690 million compared to NOK 626 million one year ago.
The total order backlog is NOK 428 million after Q1, up from NOK 302 million in Q1 2023 and
down from NOK 443 million in Q4 2023.
EBITDA
Cyviz delivered an EBITDA of NOK 5.2 million in Q1. This is an increase of NOK 2.4 million compared to last year, driven by higher gross profit in 2023 compared to 2022.
Operating expenses for the quarter were NOK 108.0 million, down from NOK 140.1 million in Q1 2023. This is mostly driven by a reduction in the cost of materials of 36.2 million. Staff costs remained stable compared to last year, and other operating expenses grew by 3.3 million.
Cyviz has implemented several measures to reduce its operational expenses in the US, and the impact of expense reductions related to this program is taking effect as planned.
Cash flow
Cyviz had a net cash flow from operating activities of NOK 33.3 million in Q1 compared to NOK -7 million in the same quarter last year. This was driven by significant customer payments, reducing accounts receivable by NOK 65.0 million in Q1 and a reduction in inventory of NOK 4.8 million.
The high receivable collection reflects Q4 bookings, which were weighed to geographical areas known for shorter collection times.
Total receivables after Q1 were NOK 105.6 million, and the inventory was NOK 16.5 million.
Net cash flow from investment activities was NOK -9.2 million in Q1, compared to NOK -7.4 million in the same quarter last year. The amount is mostly related to capitalizing R&D and new product development associated with Cyviz' new Easy Monitoring & Remote Management platform.
Net cash flow from financing activities was NOK -22.7 million in Q1 due to a reduction in the draw on the credit facility. The total draw was NOK 4.3 million at the end of Q1.
Q1 2024 REPORT CYVIZ
Financial position
Cyviz' total equity at the end of Q1 2024 was NOK 86.4 million, implying an equity ratio of 41.3%.
Long-terminterest-bearing debt amounted to NOK 6.5 million, which is related to a loan issued by Innovation Norway. The loan will be repaid over 7 years, with the next installment of NOK 0.5 million paid in Q4 2024.
The covenant structure tied to the credit facility with DNB states that Cyviz shall have an equity ratio of a minimum of 30% and an EBITDA measured at rolling 12 months at a minimum of NOK 10 million. After Q1, Cyviz' equity ratio was 41.3%, and the EBITDA (R12) was NOK 30.3 million.
Q1 2024 REPORT CYVIZ
Outlook
Following 2023, a year marked by growth in all key financial KPIs despite industry headwinds, Cyviz continues to see an increasing interest in more advanced collaboration solutions across meeting rooms, control, operation, -and innovation centers. Leads are emerging within both private and public sectors, driven by the demand for user-friendly solutions aligning with Cyviz' "Next Level Collaboration".
The market slowdown in the private sector observed in 2023 appears to have recovered, with more leads also originating from North America, which was particularly slow last year. Overall, Cyviz expects positive development in order intake across all regions and verticals throughout the year.
With the existing order backlog and the pipeline of prospective 2024 deliveries, Cyviz is well- positioned to maintain its commitment to profitable growth.
In addition to traditional turn-key solutions, the company is poised to capitalize on opportunities offered by the new Cyviz Easy Monitoring & Remote Management platform, announced in early September 2023.
The company aims to launch this multitenant cloud platform for monitoring and management through a global partner ecosystem in early Q3. This strategic initiative aims to expand the market space through partnerships and strengthen the business's subscription segment. Enabling a global partner ecosystem to drive this will increase the total addressable market for the company. The new cloud-based platform allows customers to manage and monitor all their solutions through one platform with a single interface for all their equipment, regardless of whether it is delivered by Cyviz or any other vendor.
The continuous focus on R&D efforts, dedicated to building the software platform for the future, is key to meeting customer requirements.
Aligned with market trends and the software platform launch, Cyviz remains committed to its core strategy for profitable growth, cash flow & cash conversion and increasing the share of ARR. The medium-term target of a 15-20% EBITDA margin remains.
Q1 2024 REPORT CYVIZ
Consolidated
Interim Financial Statements
Q1 2024 REPORT CYVIZ
Consolidated profit and loss accounts
Unaudited | Unaudited | Unaudited | Unaudited | ||
NOK 1 000 | Note | Q1 2024 | Q1 2023 | YTD 2024 | YTD 2023 |
Operating income | |||||
Revenue | 2 | 106,583 | 136,981 | 106,583 | 136.981 |
Total operating income | 106,583 | 136,981 | 106,583 | 136,981 | |
Operating expenses | |||||
Cost of materials | 34,936 | 71,203 | 34,936 | 71,203 | |
Salary and personnel expenses | 46,905 | 46,733 | 46,905 | 46,733 | |
Depreciation | 3.4 | 6,572 | 5,825 | 6,572 | 5,825 |
Other operating expenses | 19,587 | 16,321 | 19,587 | 16,321 | |
Total operating expenses | 108,000 | 140,081 | 108,000 | 140,081 | |
OPERATING PROFIT (LOSS) | -1,417 | -3,101 | -1,417 | -3,101 | |
Financial income and expenses | |||||
Interest income | 905 | 561 | 905 | 561 | |
Net currency gains (losses) | 464 | 2,086 | 464 | 2,086 | |
Interest expenses | -1,593 | -516 | -1,593 | -516 | |
Net financial income and expenses | -225 | 2,131 | -225 | 2,131 | |
PROFIT (LOSS) BEFORE INCOME TAX | -1,641 | -969 | -1,641 | -969 | |
Income tax | 5 | 294 | 82 | 294 | 82 |
NET PROFIT (LOSS) FOR THE PERIOD | -1,935 | -1,052 | -1,935 | -1,052 |
Q1 2024 REPORT CYVIZ
Consolidated balance sheet
Unaudited | Audited | Unaudited | ||
NOK 1 000 | Note | 31/03/2024 | 31/12/2023 | 31/03/2023 |
ASSETS | ||||
Non-current assets | ||||
Intangible assets | ||||
Research and development | 50,566 | 43,481 | 41,644 | |
Licenses, patents, other | 12,675 | 13,722 | 16,407 | |
Total intangible assets | 3 | 63,241 | 57,203 | 58,051 |
Tangible fixed assets | ||||
Property, plant & equipment | 4.6 | 11,399 | 12,858 | 8,368 |
Total tangible fixed assets | 11,399 | 12,858 | 8,368 | |
Total non-current assets | 74,640 | 70,061 | 66,420 | |
Current assets | ||||
Inventories | 6 | 16,451 | 21,276 | 36,207 |
Receivables | ||||
Accounts receivable | 6 | 105,559 | 170,545 | 131,035 |
Other receivables | 11,071 | 13,244 | 13,503 | |
Total receivables | 116,630 | 183,789 | 144,538 | |
Cash and cash equivalents | 1,377 | 0 | 0 | |
Total current assets | 134,458 | 205,065 | 180,745 | |
TOTAL ASSETS | 209,098 | 275,126 | 247,165 |
Q1 2024 REPORT CYVIZ
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Cyviz AS published this content on 16 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 May 2024 08:15:07 UTC.
