4C Group

2022 Q2

• Net sales MSEK 83.3 (64.8)
• FX adjusted organic net sales growth 22% (67%)
• Software revenue MSEK 51.4 (38.8)
• EBIT MSEK 2.7 (14.6)
• EBIT margin 3% (22%)
• Adjusted EBIT MSEK 12.3 (14.6)
• Adjusted EBIT margin 15% (22%)
• Net income MSEK 5.0 (10.1)

2022 Q1-Q2

• Net sales MSEK 159.3 (101.0)
• FX adjusted organic net sales growth 49% (28%)
• Software revenue MSEK 98.6 (50.0)
• EBIT MSEK 5.8 (6.0)
• EBIT margin 4% (6%)
• Adjusted EBIT MSEK 20.6 (6.0)
• Adjusted EBIT margin 13% (6%)
• Net income MSEK 7.9 (3.2)

A word from the CEO

Continued strong profitable growth as 4C Strategies' offering is more relevant than ever
At the closing of the second quarter of 2022, the offering of 4C Strategies is more relevant than ever, given the turmoil and uncertainties in the world. Our customers are more active in the markets we serve, and we are seeing a continued increase in demand for our software and services. This situation, along with strategic investments, have seen us expand and accelerate our growth and global expansion, one of the key objectives with listing 4C Strategies in 2022.
In North America our operations continue to develop according to expectations, and the progress of the US Army project constitutes a strong foundation for a long-term relationship with the US Department of Defence. We are also pleased to see accelerated growth in both the Nordics and International segments. The second quarter resulted in MSEK 83.3 in net sales, reflecting in 22% FX adjusted organic net sales growth. Our net sales RTM amounted to MSEK 319.6, a steady FX adjusted organic net sales growth of 53%.

Increased software sales
The software sales continue to grow on a quarterly basis. During Q2, this amounted to MSEK 51.4 showing a MSEK 12.6 growth, and on an RTM basis the software sales amounts to MSEK 208.1, a growth of 97%. This is based on a combination of expanding use within existing software customers, and adding new organisations to the Exonaut community. New long-term strategic software contracts were signed with a number of customers, for examples, a Nordic-based defence force and a global humanitarian organisation. This is in line with our strategic direction and meaningful steps considering the current situation in Ukraine and the expansion of NATO.

New office in Australia broadens our geographical footprint in APAC
We signed our first contract with the Australian Defence Forces (ADF) in 2015, and as promised during the listing process, we are excited to announce our physical expansion to Australia. With an office in Brisbane opening this summer, and a strong local core team, we are prepared to expand our close relations with ADF and address new key clients in the APAC region. We expect growth in our defence portfolio, but also see great potential in Australia and the wider APAC region, with all our core offerings. And through local knowledge, we can support our current and future customers even better. The Australia expansion will develop the business within our International segment, and we are well prepared and experienced entering new markets.

Exonaut Next Generation and the development of My Exonaut strengthens our offering
With continued heightened requirements on all types of organizational readiness and with a global focus on ensuring that investments in training, both in the defence and public and corporate domains, are delivered with the highest possible results, the successful launch of Exonaut Next Generation was a very important milestone during the second quarter. As one example, a major global oil and gas company used the new version of the software in a world-wide exercise with great results. This first real world exposure confirmed that our software is effective, secure and that the new user interface and features were well received by the users. To strengthen our offering even more, a cutting edge solution for tracking individual training has been developed together with two of our most important defence customers in Europe. The solution, called My Exonaut, will be available in full-scale for the global market during 2023 and can be used by both defence, public and corporate organizations. During the year, we have further invested in our product development team with additional developers to support our position as a leading provider of organisational readiness, training and crisis management.

Investments in expansion, sales and software development
Currently our journey is focused on growth. Therefore, the quarter was impacted by increased OPEX related to accelerated development of Exonaut, new sales office in Australia and strengthening of the sales force, investments that short-term have a negative impact on the profitability. In the mid-term, we expect to deliver according to our financial targets; 20% organic net sales growth and 20% adjusted EBIT margin, this will be supported by reaching our target of 70% software revenue. Adjusted EBIT for the quarter amounted to MSEK 12.3 corresponding to an adjusted EBIT-margin of 15%. On an RTM-basis, the adjusted EBIT amounted to MSEK 64.2 corresponding to an adjusted EBIT-margin of 20%.

We remain confident with our ambition
The growing interest among our customers to further develop their readiness through exercise and crisis management continues to strengthen our position as a software company. We are pleased to serve 150+ customers on an RTM basis, including the likes of the US Army, Verizon, NATO allied forces, the British Army, and more. Following the public listing, we are in a stronger financial position which gives us stability to address and expand into new markets such as APAC. With a broader brand awareness, and with our market-leading software, we look forward to becoming an even more attractive partner and contributing to building safer societies around the globe. We have increased our own readiness to grow and continue to expand and scale our software for increased profitability and a better world.
The conflict in Ukraine has raised the importance of defence and resilience activities. As the activity level across our sectors continues to be high moving into the third quarter, I would like to take the opportunity to thank our employees for stepping up the service to all our customers in these difficult times.

Magnus Bergqvist
CEO, 4C Group AB (publ)

Read the entire report in the attached PDF.

Invitation to webinar for the presentation of 4C Strategies’ interim report, Q2 2022
Today at 09:30 CET, a presentation will be held where analysts, investors, media and other stakeholders are invited to participate. The presentation will be a webinar where 4C Strategies’ Magnus Bergqvist (CEO) and Anders Nordgren (CFO) will comment on the published report and answer questions. The presentation will be in English.

Afterwards, the presentation material will be available on 4C Strategies’ website under 'Reports and Presentations'.

For participation at the presentation:
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