SmartCraft ASA (SMCRT) - Q2 2023: Strong growth, record high EBITDA and continued positive market outlook
24 August 2023 - SmartCraft ASA, the leading Nordic provider of mission-critical SaaS solutions to small and mid-sized companies in the construction sector, today reported its results for the second quarter of 2023, ending the period with annual recurring revenue (ARR) of NOK 358 million, which represents a 12-month growth of 21 percent. Organic ARR growth was 15 percent.
Reported revenue in the second quarter was NOK 101 million (+24 percent), of which 96 percent was recurring. Adjusted EBITDA margin increased by 7 percentage points to 44 percent, whereas reported EBITDA margin was 43 percent (35%). The margin increase was driven by the long-term focus to scale the business and to keep costs at a reasonable level. Operating cash flow was NOK 25 million in the second quarter, compared to NOK 9 million in the same period last year. For the first half of 2023 Operating cash flow was 98 million, up 43% compared to the first half of 2022. In the second quarter, the group had a stable low churn of 7 percent.
"We provide mission critical SaaS-based solutions that help small and medium sized construction companies generate more revenue and reduce cost. Hence, we are able to continue to grow rapidly, produce very high margins and strong cash flow even though the general construction market is soft, and we believe our solutions are even more mission critical in uncertain times," said CEO of SmartCraft Gustav Line.
SmartCraft continues to focus on consolidating the construction software industry through bolt-on acquisitions in the Nordics. In July 2023, the company announced the acquisition of Coredination AB, a Swedish SaaS solution for construction companies with complementary technology and solutions to SmartCraft's existing portfolio.
"This was our tenth acquisition, and we are happy to conclude that all of them have been successful, adding significant growth after the acquisition. We have a strong balance sheet and will continue to search for attractive acquisition objects in the industry, while always being prudent and maintaining capital discipline," said Gustav Line.
SmartCraft operates in an underpenetrated market where most companies need to make a shift to a more digital way of running the business. Additionally, the market experiences strong underlying trends driven by energy efficiency measures and increased documentation requirements for craftsmen.
"Most of our customers primarily work with refurbishment and service, not new construction. Hence, our exposure to any slowdown in the general construction market is limited. On the contrary, our systematic sales and marketing efforts have produced strong results during the first half. With a good first half of 2023 and a solid revenue pipeline going into the autumn we have a positive outlook on the future and reiterate our medium-term guiding of 15-20 percent organic growth and growing margins due to the scalability of the business," said Gustav Line.
Investors, analysts, and journalists are welcome to join an English-language webcast presentation of the report today, Thursday 24 August 2023, at 08:00 CET.
Presenters: CEO Gustav Line, CFO Kjartan Bø, CMO Katja Widlund and CTO Christian Saleki.
Viewers are welcome to submit written questions through the webcast player during and after the presentation. A recording of the presentation will be available on the same link and at https://smartcraft.com/investor-relations/ after the live stream is concluded.
This information is considered to be inside information pursuant to the EU Market Abuse Regulation, and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. The stock exchange announcement was published by the contact person, at the date and time as set out above.
* Gustav Line, CEO, +47 952 67 104, [email protected]
* Kjartan Bø, CFO, +47 410 27 000, [email protected]
ABOUT SMARTCRAFT ASA
SmartCraft is the leading Nordic provider of mission-critical SaaS solutions to SME's in the construction sector. The company's business model is highly scalable, based on 97% recurring revenue and low churn. The construction sector is among the least digitalized industries and represents a NOK 10bn software market in the Nordics, growing at a double-digit rate. SmartCraft's solutions help customers to increase their productivity, margins, and resource efficiency.