Vertical Market Software

(1)

Vitec Software Group AB (publ)

Vitec Software Group

Vertical Market Software

(2)

Vitec Short Facts

VITEC SHORT FACTS



Software company with industry-specific solutions



Founded in 1985 by Lars Stenlund and Olov Sandberg



Annual Turnover of SEK 316 million in 2010



Operating Profit of SEK 20 million in 2010



Number of employees approx. 300, with 90% in Sweden



Active in five customer areas/(Vertical Markets)



Seven offices in Sweden, one in Oslo and one in the U.S.



Listed on NASDAQ OMX, Stockholm (Small Cap)



Aprox.1 500 shareholders

(3)

Offering

Unique Offering

We focus on industry-specific business systems that are more

cost effective than general solutions.



Software



_{Specialist Services}



Contracts for support and maintenance

Mission

With value-creating software and services we offer customers

viable, modern business support.

(4)

Business Strategy

The competition

Small competitors

with limited

resources to grow,

sometimes without

"professional"

management.

High entry barriers

Mission critical

systems with high

exchange cost and

long lead times in

developing.

Subcontractors

Low dependence on

third party vendors,

self-development

predominate.

Customers

Markets with one

hundred to several

thousand customers.

Not billion markets.

Customers option

Limited and less

cost-effective

solutions from

generalists and

consultants.

Vertical Market Software

(5)

Growth Strategy

2 - Refine

Create operational

improvements and

establish strategic

direction.

Increase Cash Flows.

2 - Refine

Create operational

improvements and

establish strategic

direction.

Increase Cash Flows.

3 - Grow

Implement additional

acquisitions and

organic growth.

3 - Grow

Implement additional

acquisitions and

organic growth.

1 - Acquire

Identify and select

vertical market

acquisition candidates

and negotiate and

acquire.

1 - Acquire

Identify and select

vertical market

acquisition candidates

and negotiate and

(6)

(7)

Selection of customers – Property managers

(8)

Business Area Fastighet

Rental coupon

Tenant pages

(9)

Selection of customers - Mäklare

(10)

Business Area Mäklare

Data for www.hemnet.se

Purchase Agreement

(11)

Selection of customers - Energi

(12)

Business Area Energi

Power load forecasts

Network calculations of electricity load

Windpower forecasts

(13)

Selection of customers – Finans och Försäkring

(14)

Business Area Finans och Försäkring

Mortgage calculations

Pension Calculations

(15)

Selection of customers - Media

(16)

Business Area Media

(17)



1985 Vitec is formed



1998 Listing on Aktietorget



1998–2002 Acquisition of

companies offering software for real

estate management



2002 – Year of IT-crash. Vitec gives

dividend for first time (0.25 kr)



2003 – Strategies for growth and

acquisitions are formulated



Vitec completed 10 company

acquisitions and nine acquisitions of

product rights or assets.



2010 - Turnover is SEK 316 million

(Dividends of SEK 1.25)



2011 - First acquisition outside of

Sweden

0 50 100 150 200 250 300 350

Turnover (million SEK)

History of successful growth

(18)

Strong Earnings Growth

0

5

10

15

20

25 2003

2004

2005

2006

2007

2008

2009

2010

22,4 %/year

(19)

Revenue Growth

0

50

100

150

200

250

300

350 2003

2004

2005

2006

2007

2008

2009

2010

Capitex

3L System

Mäklarsystem

Media

Energi

Fastighet

25%/år

Growth is driven both organically and through acquisition of new business areas

( mill

io

n

(20)

Growth while maintaining profitability

0%

5%

10%

15%

20%

25%

30%

2002

2003

2004

2005

2006

2007

2008

2009

2010

(21)

Locations and Employees

Year

Location

No. Of employees

1985

Umeå

31 1998

Stockholm

68 2000

Malmö

6 2001

Göteborg

53 2003

Västerås

12 2005

Linköping

45 2009

Dayton Ohio, USA

20 2009

Östersund

7 2010

Kalmar

70 2011 Oslo

14

(22)

Interim Report January - September 2011

EARNINGS PER SHARE UP 123 %



NET SALES 265,7 Mkr (214,2)



OPERATING PROFIT 30,2 Mkr (11,6)



OPERATING MARGIN 12 % (6)



EARNINGS PER SHARE 5,11 kr (2,29)



CASH FLOW 42,7 Mkr (36,1)



LISTING ON NASDAQ OMX STOCKHOLM



ACQUSITION OF IT MAKERIET A/S IN NORWAY

Key events in the third quarter 2011

•

Vitec subsidiary 3L System AB (publ) signs a contract worth 2.3 million USD

Significant events after the period

•

Vitec call an extraordinary general meeting on 11 November concerning proposals for convertibles to

employees of the Vitec Group.

(23)

Turnover and repetitive portion per quarter

0,0

20,0

40,0

60,0

80,0

100,0

120,0

Q3-08

Q3-09

Q3-10

Q3-11

0,0

20,0

40,0

60,0

80,0

100,0

120,0

Turnover

Repetitive portion

Tu

rno

ve

r

(mill

ion

SEK)

R

e

p

e

titi

ve

p

ortion

(%)

(24)

Revenue and operating margin by quarter

-5

0

5

10

15

20

25

30 Q3-08

Q3-09

Q3-10

Q3-11

-20

0

20

40

60

80

100

120 Opet

atin

g

mar

gin

(%)

Tu

rno

ve

r

(mill

ion

SEK)

(25)

Income Statement January – September 2011

Income Statement Jan-Sept

2011 Jan-Sept 2010 OPERATING REVENUE License revenues 17 670 15 304 Recurring revenues 157 120 127 270 Service revenues 82 581 63 872 Other income 8 350 7 704 NET TURNOVER 265 720 214 150

Other operating income 1 152 2 399

Depreciation -17 001 -12 585

Work performed for own account 9 909 8 166

Other costs -227 570 -199 063

OPERATING EXPENSES -234 662 -203 482 OPERATING PROFIT 32 210 13 067

Financial items -2 030 -1 426

INCOME AFTER FINANCIAL ITEMS 30 180 11 641

Tax -6 788 -3 269

NET INCOME 23 392 8 372

Attributable to the shareholders of Vitec 21 930 8 942

EARNINGS PER SHARE (SEK/share) 5,11 2,29

Recurring

Service

Licence

Other

0 1 2 3 4 2004 2005 2006 2007 2008 2009 2010

(26)

Balance September 30, 2011

Balance 2011-09-30 2010-09-30

FIXED ASSETS

Goodwill 101 411 89 490

Capitalised development expenditure 25 712 20 557

Product rights 71 147 70 042

Equipment and furniture 13 095 7 148

Other non-current receivables 2 105 1 714

CURRENT ASSETS Inventories 68 87 Current assets 64 814 72 869 Cash 35 288 38 737 TOTAL ASSETS 313 640 300 644 EQUITY 112 587 86 287 MINORITY INTEREST 21 124 18 710

NON-CURRENT LIABILITIES AND PROVISIONS 66 432 81 015

CURRENT LIABILITIES 113 497 114 632

TOTAL EQUITY AND LIABILITIES 313 640 300 644

0 5 10 15 20 25 2004 2005 2006 2007 2008 2009 2010

Owners equity per share (SEK)

(27)

Cash flow January – September 2011

Cash flow _{Jan-Sep 2011} _{Jan-Sep 2010}

OPENING EQUITY

Operating profit 32 210 13 067

Adjustments for items not included in cash flow 17 001 12 585

Interests and taxes -11 938 -11 507

CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGE IN WORKING CAPITAL

37 273 14 145

Change in working capital 5 437 21 924

CASH FLOW FROM OPERATING ACTIVITIES 42 710 36 069

Cash flow from investing activities -25 765 -52 933

Cash flow from financing activities -13 777 29 112

CASHFLOW 11 704 29 349

Cash and cash equivalents at beginning of period 32 120 26 551

CASH INCLUDING SHORT-TERM INVESTMENTS AT END OF PERIOD*

35 288 38 739

• Available cash and cash equivalents at end of period includes SEK 12.6 million in 3L System AB 0 1 2 3 4 5 6 7 8 2004 2005 2006 2007 2008 2009 2010

(28)

Segment reporting January-Sept. 2011

Business area

Net turnover (million SEK)

Operating profit (million SEK)

2011 July-Sept 2010 July-Sept 2011 Jan-Sept 2010 Jan-Sept 2011 July-Sept 2010 July-Sept 2011 Jan-Sept 2010 Jan-Sept

AO Mäklare

36 095

13 824

102 042

40 947

10 864

3 459

23 460

7 268

AO Fastighet

15 570

15118

51 555

50 178

2 284

1 682

7 937

6 338

AO Energi

3 893

3 809

13 823

12 727

870 1 029

3 666

3 062

AO Media

3 695

4 224

13 202

14 191

-813

-763

-1 540

-1 822

AO Capitex

3 498

20 219

14 499

20 219

463 2 489

2 853

2 489

AO 3L System

20 479

19 518

70 596

75 888

664 -9 725

2 089

-2 673

Common

-

-2 430

554 -6 255

-1 595

Vitec Group

83 230

76 712

265 720

214 150

11 902

-1 275

32 210

13 067

AO Mäklare 73 % AO Fastighet 25 % AO Energi 11 % AO Media 0 % AO Capitex 9 % 3L System AB 6 % AO Mäklare 38 % AO Fastighet 19 % AO Energi 5 % AO Media 5 % AO Capitex 5 % 3L System AB 27 %

(29)

Board

Nils-Eric Öquist

Chairman Carl-Erik Nyquist Crister Stjernfelt

Kaj Sandart

Olov Sandberg Jan Friedman _Johansson-Birgitta Hedberg

(30)

Largest shareholders

No. of Shares* No. of

A-shares B-shares No. of Capital % Votes _%

Lars Stenlund 364 000 73 743 10,3 32,4 Olov Sandberg 364 000 38 771 9,5 32,1 Jerker Vallbo 72 000 31 750 2,3 6,5 LF Småbolagsfond 311 132 7,1 2,7 Thomas Eklund 231 763 5,6 2,1 Nils-Eric Öquist 211 450 5,1 1,9 Kristofer Stenum 135 317 3,1 1,2 Rambas AB 133 700 3,1 1,2 Avanza Pension (FRV) 132 770 3,0 1,2 Niklas Stenum 117 146 2,7 1,1 Nordnet Pensions (FRV) 46 382 1,1 0,4

Alfred Berg Småbolag 24 775 0,5 0,2

Other shareholders 2 067 832 48,8 18,1

TOTAL 800 000 3 451 450 100% 100%

(31)

(32)

Business Goals



Growth targets

Continued growth of 25 % on average, of which 5 -10 % organic.



Financial targets

Profit margin 15 %.



Dividend targets

(33)

Strategy for continued growth

Strategy

● Organic and acquisition-driven growth

● Vertical Market Orientation

- Defined market with potential

- Possible to achieve dominance

● Business models with repeatable revenue

Acqusition targets

● Target companies with turnover SEK 10 – 100 million

- Vertical Market Software Companies

- New nisch/market alt. completion

- Earnings per share critical factor

- Prize about 5-7 times annual profit depending on equity

(34)

Vitec Software Group

www.vitec.se

Vertical Market Software