April – June 2016
· Net sales increased 1 % to SEK 71.1 million (70.4)
· Operating loss for the period SEK -17.2 million (-24.4), an improvement of
30 percent
· Loss after tax for the period SEK -17.3 million (-24.5)
· Earnings per share SEK -0.36 (-0.58)
· Cash flow before changes in working capital improved with 4.8 MSEK to -14.1
(-18.9), an improvement of 25 percent
+--------------------------------------+-------+-------+-------+-------+--------
-+
|Overview |Apr-Jun|Apr-Jun|Jan-Jun|Jan-Jun|Full
-Year|
+--------------------------------------+-------+-------+-------+-------+--------
-+
|SEK thousand | 2016| 2015| 2016| 2015|
2015|
+--------------------------------------+-------+-------+-------+-------+--------
-+
|Net sales | 71 145| 70 411|132 208|127 090| 279
997|
+--------------------------------------+-------+-------+-------+-------+--------
-+
|Operating result |-17 202|-24 422|-41 337|-56 073| -116
637|
+--------------------------------------+-------+-------+-------+-------+--------
-+
|Financial net and taxes | -107| -79| -1 538| -223| -2
671|
+--------------------------------------+-------+-------+-------+-------+--------
-+
|Loss for the period |-17 309|-24 501|-42 875|-56 296| -119
308|
+--------------------------------------+-------+-------+-------+-------+--------
-+
|Balance sheet total |212 144|198 590|212 144|198 590| 205
332|
+--------------------------------------+-------+-------+-------+-------+--------
-+
| | | | | |
|
+--------------------------------------+-------+-------+-------+-------+--------
-+
|Earnings per share, basic and diluted*| -0.36| -0.58| -0.91| -1.34|
-2.84|
+--------------------------------------+-------+-------+-------+-------+--------
-+
|Operating margin | neg| neg| neg| neg|
neg|
+--------------------------------------+-------+-------+-------+-------+--------
-+
|Equity ratio | 39%| 67%| 39%| 67%|
50%|
+--------------------------------------+-------+-------+-------+-------+--------
-+
| | | | | |
|
+--------------------------------------+-------+-------+-------+-------+--------
-+
|Capitalized development costs | 6 537| 5 126| 13 073| 7 887| 18
244|
+--------------------------------------+-------+-------+-------+-------+--------
-+
|Depreciation | -4 205| -6 086| -8 125|-12 085| -20
780|
+--------------------------------------+-------+-------+-------+-------+--------
-+
Significant events during the period April – June 2016
· Seamless has signed an agreement with Wayne’s Coffee via its SEQR
subsidiary. The agreement marks an initial step by Wayne's Coffee in offering
its customers in Sweden the possibility of paying in store with the SEQR
Seamless mobile payment solution.
· Seamless has signed an agreement with the fast growing UK based payments
network GoCardless, that offers direct debit services in the United Kingdom. The
GoCardless cooperation will enable all SEQR customers to link their bank account
to the Seamless mobile payment solution, SEQR, regardless of who they bank with.
· An agreement has been signed with Raiffeisen Bank via the company’s SEQR
subsidiary. The agreement marks an initial step by the bank in offering its
customers in Romania the possibility of connecting the SEQR Seamless mobile
payment solution to their bank accounts.
· Seamless has been granted authorization by Sweden’s financial supervisory
authority, Finansinspektionen, to issue electronic money. This means that SEQR
users can send and receive money, worldwide, in real time. Under the terms of
the authorization, SEQR can also be used by minors. Money received can be
accessed instantly to make payments anywhere in the world where NFC
(contactless) payments are accepted. This service will be available to all SEQR
users after the launch.
Significant events after the close of the reporting period
· Seamless Distribution AB (publ) (”Seamless”) acquires the Norwegian
technology company MeaWallet AS (“MeaWallet”). Through the acquisition Seamless
controls important technology in the rapidly growing field of contactless
payments. At the same time the company has carried out a direct issue of new
shares in a private placement of approximately SEK 50 million to private and
institutional investors.
· SEQR is launching contactless payments in Sweden using NFC technology (Near
Field Communication). Contactless makes it possible to pay with SEQR at point of
sale (POS) terminals that support NFC which is featured on almost all modern
terminals, Consequently it is now possible to pay with SEQR in any store that
supports the functionality in Sweden or abroad, even if a retailer has no
private agreement with SEQR.
· Seamless’s mobile SEQR payment solution launches its recently announced
international remittance service. SEQR users can now make international money
transfers – or “remittances” – to non-SEQR users. Transfers from Sweden directly
to India and Thailand will be the first deployment of the service.
· SEQR launches in Austria, Ireland, Malta and Luxembourg. The company’s rapid
expansion means that consumers from 16 countries now can use SEQR globally.
CEO´s COMMENT
Improvement in financial results
After closing the books for the second quarter, it is apparent that both our
business and our finances are moving in a positive direction. Revenues in the
second quarter were 71 MSEK which is unchanged compared to last year. Our net
result, however, shows a strong improvement. We show a loss of 17 MSEK which is
30% better compared to the second quarter 2015 and moves us closer towards break
- even. Our cashflow situation is also showing a strong improvement which lowers
our need for external financing.
Breaking down our numbers further, an interesting picture emerges. SEQR, our
mobile payments division shows a nice revenue increase of 36% compared to the
second quarter 2015. We believe that this business division will continue to
develop in a favorable direction, especially because of the introduction of
contactless payments in the beginning of July, which I will discuss more below
The Seamless Distribution Systems (SDS) business division shows a strong second
quarter with revenue growth of 10 percent to 25,6 MSEK. This revenue comes with
a nice profit margin as the net result was 9,8 MSEK.
The Eproducts/Distribution division showed a revenue of 43,1 MSEK and a small
profit. We expect this business to continue to grow with positive cashflow and
net results.
Contactless and remittances introduced this quarter
Seamless is continuing to invest in its technological advantage and leadership.
Our ambition is to defend and strengthen our position as the standard for mobile
payments. During the second quarter we launched some very important functions
which create a solid base for continued and rapid growth.
The most important development during the quarter was our launch of contactless
payments. This makes it possible for SEQR users to use their phone to pay at all
modern card terminals that accept payments via NFC (Near Field Communication).
This means that SEQR users can pay at stores without SEQR having to have a
bilateral agreement with the merchant. Our acceptance network (stores where SEQR
users can pay) has become global and has now reached about 35 million stores
overnight. With this development we have removed SEQR’s biggest bottleneck which
has been the time it takes to negotiate individual agreements with merchants,
resulting in a limited number of merchants that accept SEQR payments.
Swedish merchants have been slow to accept contactless payments, but this is
about to change because the large merchants and banks have already decided to
introduce contactless technology during 2016. ICA, the largest Swedish merchant
is already accepting contactless payments which means that SEQR users already
today can pay at ICA. Internationally, contactless technology has become
standard and all new terminals installed include NFC technology.
Another important area for SEQR is money transfers. Transfers can be done in two
ways within the SEQR infrastructure. SEQR users have long since been able to
transfer money nationally and internationally between each other, so called peer
-to-peer transfers. During the quarter we also introduced remittance services
where a SEQR user can transfer money internationally to a non-SEQR user. This
business, called remittance, is very large; the market size is about 600 billion
USD. The average fee outtake from this market is around 7,5 % which makes it
very profitable to the market participants. We feel that we have a very good
position in this market where we can compete on price due to our infrastructure
efficiency. The individuals that traditionally use remittance services are very
price sensitive but have up to now, largely, been forced to use the traditional
expensive methods of remittance.
So as I look forward to the rest of the year, I expect it to be as interesting
as the first half. Seamless/SEQR is very well positioned in the fintech industry
and is poised to capitalize on our technological advantages.
Have a very pleasant summer!
Peter Fredell
CEO
This is the type of information that Seamless Distribution AB (publ) is required
to disclose pursuant to the Securities Market Act and/or the Financial
Instruments Trading Act. The information was submitted for publication on July
15, 2016 at 08:50 a.m. (CET).
CONTACT DETAILS
For further information, please contact:
Peter Fredell, CEO
Peter.fredell@seamless.se +46 8 564 878 00
ABOUT SEAMLESS
Seamless is one of the world’s largest suppliers of payment systems for mobile
phones. Founded in 2001 and active in 35 countries, Seamless handles more than
3.9 billion transactions annually through 585 000 active sales outlets. Seamless
has three main business areas including the transaction switch, the technology
provider for the distribution of e-products and the mobile payment platform
SEQR. Seamless shares are traded on NASDAQ OMX Stockholm. www.seamless.se
The Seamless Interim Report 2016 for the period April– June 2016 has been
approved for publication by the Board of Directors, by its decision on July 14,
2016. This financial report has not subjected to a review by the Company’s
auditors.
