4C Group

2022 Q3

• Net sales MSEK 81.0 (62.2)
• FX adjusted organic net sales growth 16% (20%)
• Software revenue MSEK 58.7 (43.8)
• EBIT MSEK 13.1 (13.1)
• EBIT margin 16% (21%)
• Adjusted EBIT MSEK 13.6 (13.1)
• Adjusted EBIT margin 17% (21%)
• Net income MSEK 13.3 (12.0)

2022 Q1-Q3

• Net sales MSEK 240.3 (163.2)
• FX adjusted organic net sales growth 36% (25%)
• Software revenue MSEK 157.3 (93.9)
• EBIT MSEK 18.9 (19.2)
• EBIT margin 8% (12%)
• Adjusted EBIT MSEK 34.2 (19.2)
• Adjusted EBIT margin 14% (12%)
• Net income MSEK 21.1 (15.1)

A word from the CEO

Accelerating software growth in a turbulent world

The turbulence in the world around us continues. The ongoing war in Ukraine, combined with higher interest rates and accelerating inflation, has increased uncertainty for many businesses and organizations, as well as for entire countries. At the same time, partly because of this development, the demand for our software and services steadily increased. 4C Strategies continues to be well positioned supporting our customers in reaching their targets of building safer societies around the globe. During the quarter we proceeded with strong and profitable growth, expanding our business through deepened customer relationships, and extensions of ongoing projects and new software contracts.

From a financial perspective the third quarter reached MSEK 81.0 in net sales, an FX adjusted organic net sales growth of 16%. Net sales on an RTM basis amounted to MSEK 338.3, an FX adjusted organic net sales growth of 51%. The software sales share of revenue continued to grow and for the third quarter reached MSEK 58.7, up MSEK 14.9 compared to the third quarter of last year. On an RTM basis software sales amounted to MSEK 223.0, representing 66% of total net sales and indicating a positive trend towards one of our financial targets.

New signing in North America strengthens 4C´s market leading position

During the third quarter we signed an important contract extension with a Defence customer in North America, worth approximately MUSD 2.0. The contract includes licensing and development and aims to fund a baseline prototype ahead of the anticipated production phase planned for 2023. The planned development will serve the customer for many years to come. It is also another important step forward as we grow our operations in North America. Furthermore, in our North America segment, the established project with the US Army continued, and further steps were taken towards the planned production phase starting 2023. All this is according to expectations and as scheduled.

Increased activities in Nordics and International

Our operations in the International and Nordic segments continued to develop positively in the third quarter, resulting in increased growth and improved software sales. During the quarter, we experienced increased activities within all customer groups. Significant sales-related activities were carried out, including participation at the international defence exhibition Land Forces 2022, which took place in Brisbane, Australia. We expect that these activities will support our newly established business in the region and allow us to gain a stronger foothold in the entire region.

Investments in software development, brand recognition and sales

In alignment with our strategic direction, our focus on developing new software modules and solutions continues and increases. These investments will strengthen our offering towards all customer groups, with additional targeted efforts towards our resilience solution right now, aimed at boosting our corporate business and driving future sales around the globe.

Our solution for tracking individual training, MyExonaut, continued to generate software sales during the quarter. It will be available in full-scale for the global market during 2023 and will be a valuable compliment to the collective and individual training solution in Defence, but also with growing interest in the Corporate and Public domain.

4C is a growth company. Moving forward we will maintain a consistent focus on growth and expanding our business. The investments in sales activities, brand recognition and our product development organisation will strengthen our position as a leading provider of organisational readiness, training and crisis management, but will also have a short-term negative impact on our profitability.

From a longer perspective, we expect to deliver according to our financial targets, meaning a 20% organic net sales growth and a 20% adjusted EBIT margin - and we are striving to increase our software sales to 70% of total net sales. Adjusted EBIT for the quarter amounted to MSEK 13.6 corresponding to an adjusted EBIT-margin of 17%. On an RTM basis, the adjusted EBIT amounted to MSEK 64.6, corresponding to an adjusted EBIT-margin of 19%.

Stay focused on supporting customers around the globe

To summarize, the world continues to be turbulent, and we see uncertainty growing day-by-day. Today we proudly serve over 150 customers, companies, as well as organizations, among them the US Army, Verizon, Oatly, NATO allied forces, and the British Army. 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 together with our customers. Our premium products and solutions, a growing long-term customer base and the strong financial position we gained through our public listing, gives us the means to do just that.

Now we continue our journey. I look forward to being part of it.

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, Q3 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:
Sign up here