> Strong sales growth (+118 percent)
> Strong margin improvement (EBITDA margin of 14 percent)
> Acquisition of SysTech International in the U.S. completed
> Agreement signed with regards to the takeover of BIMA's workshop equipment
division from Volvo Personbilar
Full Year (January - December, 2008)
• Sales increased to SEK 145.0 million (66.5), equivalent to a growth of 118.0
percent
• EBITDA increased to SEK 20.0 million (6.0)
• EBITDA margin increased to 13.8 percent (9.1)
• Net earnings amounted to SEK 4.5 million (3.7)
• Earnings per share after dilution amounted to SEK 0.03 (0.06)
• The total number of shares outstanding at the end of the period was
193,062,046 (64,181,571) after dilution and the average number of shares
outstanding during the period amounted to 143,783,163 (59,872,918)
• The Board suggests to the Annual General Meeting that no dividend shall be
paid out for 2008
Reporting Period (October - December, 2008)
• Sales increased to SEK 47.5 million (22.7), equivalent to a growth of 108.8
percent
• EBITDA amounted to SEK 3.5 million (4.0)
• EBITDA margin amounted to 7.3 percent (17.6)
• Net earnings amounted to SEK 1.7 million (2.2)
• Earnings per share after dilution amounted to SEK 0.01 (0.03)
• The total number of shares outstanding at the end of the period was
193,062,046 (64,181,571) after dilution and the average number of shares
outstanding during the period amounted to 193,062,046 (64,181,571)
Notable Events During the Reporting Period (October - December, 2008)
On November 26, 2008, Opus signed an agreement to take over Bilmateriel AB's
(BIMA) operations of workshop equipment sales and support to both Volvo dealers
as well as to independent garages. The business generates an annual turnover of
around SEK 100 million with good profitability. Opus took over the operations
starting January 1, 2009.As a part of the transition BIMA transferred 18
existing Volvo employees, inventories of workshop equipment and spare parts, the
existing order backlog and the right to use the BIMA trademark in combination
with the Opus brand. Furthermore, the parties have signed a five-year
cooperation agreement with regard to the development of future workshop concepts
at Volvo dealers.The takeover is expected to have an immediate positive impact
on earnings per share.
On the 20th of November, 2008, Märtha Josefsson was elected as a new Board
member in Opus. The decision was made at an extraordinary general meeting.
Furthermore, Board members Jörgen Hentschel and Henrik Wagner Jörgensen have
decided to resign from the Board.The above changes to the Board are a part of
the preparations for an initial public offering on OMX and an action to adapt
the Board to the OMX regulations with regards to independence of the members
from the company and the company´s management.
During 2008, preparations for a re-listing to OMX Smallcap were initiated.
During the year both costs (approx. SEK 2 million) and time have been devoted to
the project. It is the Board's intention to continue the project and complete
the re-listing during 2009.
Other Notable Events During the Full Year (January - December, 2008)
Nordic
During the first quarter the company experienced a breakthrough within equipment
for vehicle emission testing. In connection to the AUTO exhibition in Gothenburg
2008, Opus Prodox was informed that A-Katsastus, the Finnish equivalent to
Svensk Bilprovning AB, had approved Opus equipment for vehicle emission
testing.The approval marks a breakthrough in the Finnish market for Opus and the
company's Finnish distributor Suomen Työkalu Oy. Sales to A-Katsastus have been
good during the year.
Sales to Svensk Bilprovning AB in Sweden have been weaker during a period as
Svensk Bilprovning AB has been awaiting a decision regarding their future. Opus
expects that the market for equipment to vehicle inspection testing will
increase strongly when the vehicle inspection market is opened up for private
participants by 2010, as this will lead to additional test lines according to a
study by McKinsey on behalf of the Swedish government.
Other Europe
Within the business area Fleet Management, during the month of May, Opus
received its first order for the company's new version of the log TripLogPRO, an
electronic driver's log that also includes GPS and map programs. A new version
of the TripLogPRO was launched during the CEBIT exhibition earlier this year and
BMW became the first customer of this product.The system is specially tailored
for the DACH region, namely Germany,Austria and Switzerland.The order was worth
SEK 1.5 million. BMW also expressed a desire to brand the product as ”BMW” to
increase the impact on the market.
In June, 2008, Opus won a public procurement in Poland through its distributor
WSOP regarding test equipment for exhaust-emission tests and analysis, to be
delivered to vocational schools for mechanics.The order was worth SEK 2.0
million and was delivered in full during the third quarter.
In September, 2008, Opus Group completed its largest international marketing
campaign ever by participating at the Automechanika exhibition in Frankfurt.
More than SEK 1 million was invested in the exhibition by Opus, which burdens
this year's result.The exhibition was very successful and Opus expects to see an
impact from this campaign on sales during the coming years.
North America and the Acquisition of SysTech
On April 9, 2008, Opus announced that an agreement had been signed to acquire
SysTech International in the United States. By acquiring SysTech International
Opus becomes a leading supplier of complete solution for automotive emission and
safety inspection programs.The acquisition is expected to enhance Opus'
possibilities for further international expansion and establishes the company on
the North American market. SysTech International is one of the fastest growing
companies in the American vehicle inspection market and reported a turnover of
approx. SEK 113 million and an EBITDA margin (Earnings before interest, taxes,
depreciation and amortization) of approx. 23 percent in 2007.
At the extraordinary general meeting on April 25, 2008, the meeting decided to
approve the Boards decision as per April 7, 2008, of a directed share issue to
the sellers of SysTech, totalling 20,000,000 shares for a subscription price of
SEK 3.00 per share (a total of SEK 60.00 million) and a directed share issue to
institutional investors for a total of 21,125,000 shares for a subscription
price of SEK 2.00 per share (a total of SEK 42.25 million).The weighted average
subscription price for both issues was SEK 2.49 per share.The meeting agreed to
authorize the Board, until the next Annual General Meeting, to decide on a
rights issue to partly finance the acquisition of SysTech.
On April 29, 2008, the acquisition of American SysTech International was carried
out according to plan. The purchase price of SEK 226 million was financed
through two successful new directed share issues, debt financing from Nordea and
a vendor's note to the sellers.
In May, 2008, the company carried out a new share issue with preferential right
for the existing shareholders, as decided by the Board, with the right to
subscribe for five (5) new shares for six (6) existing shares in Opus at a
subscription price of SEK 1.20 per share.The rights issue was oversubscribed
by16 percent. In total 87,755,475 shares were issued and the company was
provided SEK 105,306,570 before issuing costs.The vendor's note for the SysTech
acquisition of SEK 46 million and the bridge financing provided by Nordea of SEK
30 million was paid off as planned on June 13, 2008.
During the third quarter, the delivery of 5,000 systems for Remote OBD to Oregon
in the U.S. was completed. Installation of the antenna system was initiated
during the fourth quarter of 2008. Remote OBD is one of the Opus Group's
patented technologies that automates and simplifies environmental testing and
control of vehicles. Several U.S. states have shown an interest in Remote OBD
and the company's management believes that this technology may be one of the
company's most important going forward.
In the U.S., vehicle inspection is privatized and operated in a number of
counties and states. Opus sees a strong trend in that the number of counties
conducting environmental testing in the U.S. will increase as environmental
awareness has increased and the number of areas that exceed the permitted levels
of air quality also has increased.The new democratic administration is
considered to have a positive impact on the general trend to introduce more
environmental measures.
Asia and Pacific
The company has decided on a conscious effort in emerging markets where
management considers that the need for environmental testing equipment and
vehicle inspection will grow in the next 10-year period.
In the beginning of the year, Opus signed an agreement with New Zealand's
largest vehicle inspection company regarding the supply of equipment for vehicle
emission testing of vehicles.The agreement was signed by Opus New Zealand
distributor Sulco. Opus won two of three completed procurements concerning the
delivery of equipment to testing stations in New Zealand.The equipment was
supplied by Opus during the spring and will be used for environmental testing of
imported cars.This will be a good reference case for future expansion within the
region.
During April, 2008, Opus expanded its presence in the Chinese and Asian market
(APAC) by appointing a sales and marketing director in Asia to identify the
market opportunities for environmental test equipment for vehicles and to build
up sales in the region with a focus on China.
Notable Events after the End of the Period
The takeover of Bilmateriel AB's (BIMA) workshop equipment division was
completed according to plan during the month of January, 2009.
Outlook 2009
AutomotiveTest Equipment
In this business segment the company experienced a downturn during the second
half of 2008. It is management's judgement that the weaker sales are a result of
the current global economic situation which has caused customers to be more
careful with regard to new investments.The end customers in this business
segment are to a certain extent car dealers which have been hit by lower car
sales volumes. At the same time car owners are expected to repair their cars to
a greater extent which can lead to higher demand for test equipment and to some
extent mitigate the foreseen downturn.
The different geographical markets provide mixed signals for 2009 but management
expects the downturn on the equipment side to continue during the year whilst
some compensation can be obtained through some new customers and markets which
were gained during the Automechanika exhibition in September 2008.
To respond to the lower demand for test equipment, management has initiated a
review of rationalisation possibilities between Opus' Swedish and Danish
operations and the opportunities to move more production to the company's
production facility in China in order to improve the gross margins.
Starting January 1, 2009, Opus Bima AB (previously BIMA's workshop equipment
division) became part of the Opus Group. Management has made a conservative
budget for 2009 and the unit is expected to contribute positively to this years
results.
Vehicle Inspection Systems
The Opus Group runs Vehicle Inspection programs primarily in the U.S.. No
downturn has been experienced despite the turmoil on the U.S. financial
markets.The business is stable and independent of the general economic climate.
During the fourth quarter, SysTech delivered good results exceeding their
targets and a further strengthening of the USD can further impact the results
positively during 2009.
The Remote OBD project in Oregon continues as planned and started generating
income in 2008. Several other states have also shown interest in Remote OBD and
it is the management's opinion that the shift to a democratic president will
have a positive impact on increased environmental investments and testing in the
U.S.
During 2008, the work of presenting SysTech's technology to other customers on
the global market was initiated.This work continues during 2009.
Fleet Management & Telematics
Sales volume of electronic driver's logs to BMW have been lower than expected
during 2008 but steadily increasing over the year. For 2009 a new driver's log
under the “BMW brand” is being develo-ped.The new BMW version is expected to
lead to higher sales volumes through better penetration of distributors as a BMW
product.
During 2009 Opus' product portfolio will expand. New products that will be
launched during the year include an Alcolock, ”Triplog Alco Lock”, which
combines the Alcolock function with the electronic driver's log. Another new
product is an Alcometer which will have the same precision as the ones the
police use and with a competitive price.
Opus Group
Following the takeover of Bilmateriel AB's workshop equipment division, Opus'
income distribution will change whereas a larger portion of the company's
revenues will originate from equipment sales which have a lower profitability
than the systems side.
The Board of Opus is however of the opinion that the expansion opportunities for
the systems side, primarily in the U.S., remain attractive and have therefore
chosen not to revise the financial targets which were approved during this
spring and which were presented in connection to the acquisition of SysTech.
The Board would however like to point out that the company's profitability
target based on an EBITDA margin exceeding 20 percent relates to an average over
the coming three-year period and that the company may during the early stage of
that period be below the target.
Opus' financial targets:
• Average annual net sales growth of 30-40 percent during the next three-year
period (2009-11), including both organic and acquisition driven growth
• Turnover of SEK 500 million by 2012
• Average EBITDA margin above 20 percent during the next thee-year period
(2009-11)
During 2008, preparations for a re-listing to OMX Smallcap were initiated.
During the year both costs and time have been devoted to the project. It is the
Board's intention to continue the project and complete the re-listing during
2009.
Comments to the Reporting Period, October - December, 2008, and the Full Year
2008
Sales
Sales for the current reporting period, October - December, 2008, amounted to
SEK 47.5 million (22.7). This represents a sales growth of approx. 109
percent.The increase can be attributed partly to the acquisition of SysTech
International in the United States, which is included from April 30 in the
consolidated accounts.
For the financial year, sales amounted to SEK 145.0 million (66.5).This
represents a sales growth of approx. 118 percent.
On a pro forma basis sales for the full year amounted to approx. SEK 175
million.
Results
Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted
to SEK 3.5 million (4.0) for the current reporting period, October - December,
2008. The EBITDA margin amounted to 7.3 percent (17.6).The 2008 fourth quarter
EBITDA includes one-off costs of approx. SEK 2.0 million (0.0) relating to the
OMX re-listing project and write-downs of inventory and accounts receivables of
approx. SEK 2.0 million (0.1).
Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted
to SEK 20.0 million (6.0) for the financial year.The EBITDA margin increased to
13.8 percent (9.1).The 2008 full year EBITDA includes one-off costs of approx.
SEK 2.0 million (0.0) relating to the OMX re-listing project and write-downs of
inventory and accounts receivables of approx. SEK 2.5 million (0.1).
On a pro forma basis EBITDA for the full year amounted to approx. SEK 30
million, equivalent to an EBITDA margin of approx. 17 percent.
Acquired IP rights are written-off over five years, which affects the Group's
earnings negatively. In connection to the SysTech acquisition the company
acquired IP rights of USD 12.3 million. During the fourth quarter the write-offs
relating to these IP rights amounted to approx. SEK 4 million (USD 0.6 million).
For this reason, the company uses EBITDA, which excludes these write-offs, as a
key performance measurement of the Group's profitability.
Investments
No specific investments in addition to current ongoing development projects and
the acquisition of SysTech were completed during the year.
Dividend
Considering Opus' growth plans the Board will suggest to the Annual General
Meeting that no dividend shall be paid out for 2008.
Financial Position and Liquidity
The equity ratio amounted to approximately 69 percent (62) at the end of the
financial year. The cash flow from operating activities amounted to SEK 5
million (-12) for the full year and cash and cash equivalents at the end of the
period amounted to SEK 6 million (4).
Annual General Meeting 2009
The Annual General Meeting will take place at 19:00 (CET) on Wednesday May 27,
2009, at Elite Park Avenue Hotel (the Taube hall), Kungsportsavenyn 36-38,
SE-400 15 Gothenburg. Registration to the Annual General Meeting starts at 18:00
(CET). Notice will be publicized through a press release and on the company's
web page, and will be announced in Post- och Inrikes Tidningar and Dagens
Industri.
Accounting Policies
This interim report was prepared in accordance with IFRS. For information about
the accounting policies applied please refer to the 2007 annual report.The
accounting policies are unchanged from those applied in 2007.
Accounting Estimates and Assumptions
The preparation of financial reports in accordance with IFRS requires the Board
of Directors and Management to make estimates and assumptions that affect the
application of accounting principles and the carrying amounts of assets,
liabilities, revenue and expenses.Actual outcomes may deviate from these
estimates.
Financial Information 2009
May 20, 2009, Interim report 1st quarter 2009
May 27, 2009, Annual General Meeting 2009
August 27, 2009, Interim report 2nd quarter 2009
November 26, 2009, Interim report 3rd quarter 2009
February 25, 2010, Year-end report 2009
The annual report 2008 is expected to be published on or before May 13, 2009.
The annual report will be made available to the public on the company's website
www.opus.se.
This report has been subject to auditors' review.
Gothenburg, February 23, 2009
Magnus Greko
President and CEO
Contact Information
Opus Prodox AB (publ), (org no 556390-6063)
Bäckstensgatan 11C
SE-431 49 Mölndal
Sweden
Phone: +46 (0) 31 748 34 91
Fax: +46 (0) 31 28 86 55
E-mail: info@opus.se
www.opus.se
For any questions regarding the year-end report, please contact Magnus Greko,
President and CEO, +46 (0) 31 748 34 91 or +46 (0) 705 58 45 91.
Opus Certified Adviser
Thenberg & Kinde Fondkommission AB Box 2108 403 13 Gothenburg Phone: +46 (0) 31
745 50 00
Opus Prodox AB in Brief
The Opus Group is in the business of developing, producing and selling products
and services within the business segments Automotive Test Equipment,Vehicle
Inspection Systems and Fleet Management for the global market.The products
include emission analyzers, diagnostic equipment, brake testers, wheel
alignment, automatic test lines, vehicle databases, Fleet Management systems,
electronic driver log systems, and alco-locks. Services include management of
mandatory vehicle inspection programs. The Group sells its products and services
in more than 50 countries all over the world and currently employs around 170
persons.The turnover for 2008 (pro forma acquisitions) was SEK 175 million. Opus
shares are listed on First North (Stockholm Stock Exchange) under the ticker
OPUS.
AUDITOR'S REPORT ON THE REVIEW OF THE INTERIM REPORT
Introduction
I have reviewed the interim report for Opus Prodox AB (publ) for the period
2008-01-01 - 2008-12-31. It is the Board of Directors and the Managing Director
who are responsible for the presentation of this interim report in accordance
with IAS 34. My responsibility is to express a conclusion on this interim report
based on my review.
The Scope of the Review
I have conducted my review in accordance with the Standard on Review
Engagements, SÖG 2410, Review of the Interim Financial Information Performed by
the Independent Auditor of the Entity, issued by the Federation of Authorized
Public Accountants.A review of the interim report consists of making inquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially
smaller and less in scope compared to an audit conducted according to Standards
on Auditing in Sweden (RS) and other generally accepted auditing practices.The
procedures performed in a review do not enable me to obtain a level of assurance
that would make me aware of all significant matters that might be identified in
an audit. Accordingly, the conclusion expressed based on a review does not
constitute the same level of assurance as a conclusion based on an audit.
Conclusion
Based on my review, nothing has come to my attention that causes me to believe
that the interim report, in all material respects, is not prepared for the Group
in accordance with IAS 34.
Gothenburg, Sweden, February 23, 2009
Lennart Persson
Authorized Auditor
BDO Nordic
