Zutec today released Q1-21 report: Break-through Quarter with 47.2% Organic Growth and 19.4% EBITDA Margin

Financial Highlights
  • Net sales was SEK 10.1m, corresponding to a 47.2% increase compared with the same period in 2019 (SEK 6.8m).
  • Reaching SEK 10m in quarterly sales was a significant milestone.
  • EBITDA of SEK 2.0m (SEK -3.7m) corresponding to an EBITDA margin of 19.4%.
  • Net profit was SEK 0.1m compared with the loss in the same period in 2019 (SEK -5.4m).
  • Basic earnings per share amounted to SEK 0.00 (-0.75).
  • Cash outflow from operating activities of SEK 7.1m primarily due to normalization of working capital as well as a result of paying the lease amounts to April 2021 on the terminated Irish head office.
  • Repayment of Athanase loan of EUR 1m plus accrued interest.
  • Finalized the funding from the equity issue of SEK 2.0m resulting in that the total number of outstanding shares on the September 30, 2020 was 44,254,389 (7,083,333).


Operational Highlights
  • Hired Chief Revenue Officer and launched new sales organization and go to market strategy.
  • EGM on July 17, 2020 elected BDO as new auditors.
  • Signed 3-year enterprise agreement of SEK 4.3m with Cairn Homes and agreements with National Children Hospital of SEK 3.2m.
  • Received Abu Dhabi trading license.


Significant Events after the Period
  • Zutec has been successfully listed for the very first time on the UK Government’s Digital Marketplace G-Cloud 12 public sector framework as a supplier of Cloud software.


Comments from our CEO

A Break-Through Quarter with Organic Sales Growth of 47.2% and EBITDA margin of 19.4%

Since I was appointed CEO in March of this year, I have had a very strong belief in what Zutec can achieve. The main driver is that we have a relevant product in a market that is going through a period of massive growth and change. As a team, we have been working hard on increasing our confidence in demonstrating that we can win and make a difference to our customers. This is now starting to come through and I am immensely proud of what our employees have achieved. Our key assets are our products as well as our people and both are of great quality.


Accelerated change in construction industry, getting ready for disruption

We are seeing some encouraging signs that the revolution in the digitization of the construction industry has started. We are also seeing that contractors are becoming strategic about technology and are very thoughtful about what software companies it wishes to partner with. Changing its incumbent software provider or procuring its first ever software provider requires due consideration. We are also seeing that data is increasingly starting to matter for most contractors since with our analytics tool our customers are able to make fact-based and real time decisions to improve their construction projects. The ongoing pandemic is further accelerating this drive towards digitization.

Sales cycles have become shorter with the time between first contact with a new customer to closing having gone down dramatically. This allows our sales team to be able to work on a larger amount of projects and new customers and hence being more productive.


“Zutec 2.0” = Growth, growth, growth

Zutec 2.0 is how we are going to grow Zutec going forwards. We are starting to see signs of what Zutec 2.0 can deliver. Our focus is about delivering growth and that is what Zutec’s focus is all about. This growth is about taking even better care of existing customers, and about getting new customers. The focus around our existing customers is about retention, upselling and getting stickier and longer revenues whilst at the same time delivering best in class services and customer satisfaction.

With our existing customers and in particular our repeat customers we are engaging in discussions around Enterprise Agreements which in our view delivers the best value to our customers and at the same time the highest quality revenues for us. Our emphasis around new customers is first to get them to try Zutec and hands-on experience the benefits of what our cloud-based software can bring as well as expose them to our great people. Winning a new customer is great but keeping a customer is better which is why we are working relentless with our development team as well as our customer care and customer success team to also adding value to our customers projects once they have started using our platform.

During this quarter we experienced growth of 47.2% and our quarterly net sales just surpassed SEK 10m. Surpassing SEK 10m in quarterly revenues is a significant milestone for us. We are seeing the benefits from both better customer retention and lower churn rates as well as improving new customer addition rates. We have also started on a limited scale making investments in marketing and that remains an area of focus for the rest of the year.


Impact from cost cutting

I earlier reported on that we in March embarked on a meaningful cost cutting and efficiency program to realign our cost base. The primary focus was to reduce our personnel costs and overheads. The vast majority of these cost cutting initiatives have now come through although some remain. We have reduced our personnel cost by 22.7% compared to the same quarter last year. We also materially reduced the external costs from SEK 4.6m to SEK 2.8m. These cost reductions are permanent. We will however start seeing an increase in personnel costs as we are continuing to build our sales and marketing teams.

As a result of the increasing sales as well as the cost reduction program, our EBITDA was SEK 2.0m corresponding to an EBITDA margin of 19.4%. Whereas we are very pleased with this result and we believe it is an indication of what Zutec can achieve in the longer term, we are mindful that substantial investments will need to go into developing the product as well as growing the team and making increased investments in marketing.

Yours faithfully,

Gustave Geisendorf


The interim report for 1 July to 30 September 2020 is attached as a PDF file.


For more information, please contact:

Gustave Geisendorf, CEO at Zutec, gustave.geisendorf@zutec.com, +353 1 201 3565


About Zutec

Zutec is a provider of cloud-based construction management software with operations in Dublin, London, Melbourne and the Middle East.

Zutec Holding AB (publ) is listed on Nasdaq First North Growth Market and Mangold Fondkommission AB is the Company’s acting Certified (Tel. + 46 8 5030 1550, CA@mangold.se, www.mangold.se).

This information is inside information that Zutec Holding AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication through the agency of the contact person set out above, November 2nd, 2020.