COMMENTS FROM THE CEO
Focus on sales
In the first quarter we increased focus on sales. After the launch of LIVE Forms in March we now have a portfolio of software products, LIVE PDF, to replace scanning and add value to document workflow, and LIVE Forms for data capture and advanced forms processing. We are commercializing digital writing on screens with Panasonic and work with our joint venture partner PenGenerations in Korea to expand digital writing with selected additional screen manufacturers. Our partner TStudy is expanding its business in China rapidly within education but also sees a number of opportunities for business solutions. We received the first order of 20,000 pens for delivery to China in Q2. Our new sales team in Amsterdam commenced operations in Q1 and is actively working to establish larger partners in the BeNeLux region. The development together with a global partner of applications for voting progresses according to plan.
Revenues in Q1 were 43 MSEK up from 41 MSEK in Q4 2012. Cash flow in the first quarter was MSEK 8 including partial proceeds from the rights offering. We received the remaining last MSEK 11 from the rights offering after the end of the quarter. The rights offering resulted in net proceeds of MSEK 39 after deduction for share issue costs. Our working capital was high at the end of the quarter, partly due to a large number of pens in stock. Our main product in business solutions, the ADP201 is being replaced at the end of this year by a new product. We therefore took a decision to produce the last batches of pens in March and April to prepare for the new production line.
Business in the UK improved from Q4 and we closed a total of 19 deals with NHS Trusts in the quarter. We received another large contract from partner Kayentis in France to be delivered to customers within insurance. Except for non-refundable engineering no significant revenues were booked in the quarter within business areas education, voting or screens, however we except higher revenues from these areas from Q2 onwards.
In Germany Anoto partner Digipen Technologies GmbH installed 250 pens at the Savings Bank of Kaiserslautern to be used to capture digital signatures for legally binding financial documents. This follows a recent verdict from the Munich Court of Appeals that pure electronic signatures are not sufficient to make agreements binding on consumers. The court decision means that for any consumer contracts, a physical signature is required as opposed to a pure digital signature written on a tablet or touchpad device. This verdict could have a significant positive impact on our business within banking, finance and insurance. In Germany alone there are 426 Savings Banks with 15,441 subsidiaries.
After the end of the quarter we have acquired DevelopIQ in the UK. The acquisition further strengthens our position in the UK and the healthcare sector and allows for synergies and optimization between our subsidiaries in the UK. We see larger opportunities within business solutions. Global companies like Allianz, Anadarko as well as German banks are starting to use our products and we get more awareness in healthcare. We will gradually reduce the inventory, which will have a positive impact on cash flow. Following a period of repositioning and product development we will in the next quarters reduce costs related to product development and increase focus on sales. Revenues are still not sufficient to cover operating expenses but we expect a gradual improvement throughout the year.
For complete report, please see attached document.
A webcast of the Q4 report will be available from 09.00 on May 3 and a Q&A session via audiocast will be held at 11.00 the same day. For more information, see www2.anoto.com/investors.
Anoto Group AB may be required to disclose the information provided herein pursuant to the Securities Markets Act. The information was submitted for publication at 08.30 on May 3, 2013.
For more information, please contact:
Stein Revelsby, CEO
Phone: +46 (0)733 45 12 05
Dan Wahrenberg, CFO
Phone: +46 (0)733 45 10 19
Anoto Group AB (publ.), Corp. Id. No. 556532-3929
Box 4106, SE-227 22 Lund, Sweden
Phone: +46 46 540 12 00