- The group made an Operating Profit of 6.7M SEK and a net profit of 575K SEK in Q2 of 2017.
- Gross margin in the quarter was 43% including the effect of licensing revenue of 1 million USD and increased margins at Pen Generations.
- Overhead costs in the quarter amounted to 15 MSEK, significantly down from Q1 2017 (48 MSEK) and Q4 2016 (80 MSEK). This is the impact of cost reduction activities flowing through to operating results. Most of the overhead costs for the Lund office are still included in the Q2 number.
- For the first half of 2017, the Company recorded 95 MSEK of revenue, negative 25 MSEK in Operating Profit, and a net loss of 37 MSEK.
- Revenue for the quarter increased from 45.7 MSEK to 49.1 MSEK despite the reduction in workforce.
CEO Comments
The acquisition of Pen Generations is beginning to pay off as it is rapidly becoming the largest revenue and profit contributor for Anoto. Recent growth in our Education business in Asia has required Anoto to double the production capacity for Pen Generations pens. With continued sluggishness in Forms sales and a seasonal and transitional lull in the Notetaking business, Pen Generations is currently the brightest spot among the existing business lines.
In Q2 2017, we continued our initiatives to restructure the business and announced the closing of the Anoto KK (Japan) office. With the Japan closure, Anoto will have only two offices, one in the UK and one in Korea.
Once again, the reduction in headcount had no impact on revenue as Q2 revenue showed a 7.4% increase over Q1.
Q2 is a turning point for Anoto. The restructuring and cost saving efforts are nearly complete and the management is turning its attention to increasing sales. Anoto hosted a global Solutions Roundtable in Seoul, Korea during the last week of June at which it shared its pen roadmap and R&D. This is a demonstration of Anoto’s new dedication to transparent communication and active cooperation within the extensive Anoto global partner network.
OUTLOOK
During the second half of 2017, Anoto’s management will concentrate on increasing sales in the Forms and Notetaking businesses. We are also already increasing our Anoto DNA (ADNA) sales activities now that this exciting initiative is ready for commercial launch.
Having recently had the benefit of lots of time with customers, I am more convinced than ever that there is a significant market for Anoto’s proprietary technology. It seems evident that in the past Anoto never tru ly made a conscious, strategically guided effort to increase the user base. It is insane to talk about market share when selling a few hundred thousand pens a year to a global population of almost 8 billion people. It is also not relevant to talk about competition with tablets as there are many areas that require a pen rather than a tablet. Starting with the Anoto Solutions Roundtable, we are now beginning to market our technology and products from scratch with a start-up mindset.
As one of our customers eloquently said, the Anoto pen is “changing everything, without changing anything.” It is an instrument where training is not necessary and adoption is relatively easy. One of our key customers who is also a professor at MIT said, “An Anoto pen is not just a pen. It is a piece of precision equipment and you guys don’t know it.” There are substantive reasons we have customers who have stayed loyal to us for years and, in spite of poor execution in the past, they still believe in Anoto and in our technology. We are now developing to our potential.
At the beginning of July 2017, Anoto launched a convertible bond offering to secure working capital to meet increased demand and to prepare manufacturing lines and inventory for our new pen launching in the third quarter of this year. We were able to close this offering on July 21st with 32.5 MSEK raised in less than one month from the announcement to closing. We did this without the help of a securities firm and without wide-net sales activities involving a prospectus. Despite having a six-month lock-up, we were able to raise substantially more than anticipated. I believe this is a sign of investor confidence returning to Anoto. With the combination of operational profit and the proceeds from the offering, Anoto’s financial position has improved significantly.
Joonhee Won
CEO, Anoto Group AB (publ)
This information is information that Anoto Group AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons above, at 08:45 CET on 1 August 2017.
Calendar 2017
Q3 Report – 7th December, 2017
Please visit www.anoto.com/investors for the latest investor calendar information.
For more information
Please contact:
Joonhee Won, CEO
Email: ir@anoto.com
Anoto Group AB (publ.), Corp. Id. No. 556532-3929
Mobilvägen 10
SE-223 62 Lund, Sweden
Phone: +46 46 540 12 00
www.anoto.com
