STOCKHOLM, July 16, 2020 /PRNewswire/ -- Strategic
5G contracts strengthen Enea
April - June 2020
- Net sales amounted to SEK 239.0
million (249.4), equivalent to a 4 percent decrease.
- Operating profit amounted to SEK 59.1
million (72.0), corresponding to an operating margin of 24.7
percent (28.9). Operating profit excluding non-recurring items
amounted to SEK 60.4 million (72.2),
equivalent to an operating margin of 25.3 percent (29.0).
- Earnings per share amounted to SEK
- Enea published two larger multi-year contracts in the quarter,
one with a leading telecom service provider in North America worth USD
15-20 million and one with a leading telecom service
provider in Germany, worth up to
EUR 24 million.
- The Annual General Meeting appointed Charlotta Sund as new Board member. The Board
was given a mandate to issue shares to finance continued
January - June 2020
- Net sales amounted to SEK 460.7
million (489.5), equivalent to a 6 percent decrease.
- Operating profit amounted to SEK 81.7
million (134.2), corresponding to an operating margin of
17.7 percent (27.4). Operating profit excluding non-recurring items
amounted to SEK 100.9 million
(137.9), equivalent to an operating margin of 21.9 percent
- Earnings per share amounted to SEK
Comments from Jan Häglund, President and CEO
Network Solutions-growing with new customers
Sales in the second quarter 2020 were SEK
239 million. Operating profit was SEK
59 million, equivalent to an operating margin of 25 percent.
Cash flow from operating activities before changes in working
capital amounted to SEK 87
These numbers are backed by several signs of strength. Despite
the corona pandemic causing delays to network projects and
investment decisions by some customers, we report increased revenue
in the Network Solutions product group. One of the reasons is that
our business stands on a stable foundation of recurring revenue
from a broad customer base. In addition, contracts with new
customers generated extra revenue in the quarter. The two new 5G
contracts with leading telecom service providers in North America and Germany were especially important and are
expected to generate significant revenue over the coming five-year
period, conferring us with a leading position on this market.
Growth in Network Solutions is largely compensating for the decline
of Operating Systems, where our Key Accounts are continuing their
migration to open source-based products.
The strong operating margin in the quarter is due to the
combination of a high share of software sales and an efficient cost
structure. In the second quarter, we witnessed the full effect of
the restructuring and cost saving actions we executed in the first
quarter of this year. We will keep adapting our organization to
business volumes with the objective of generating healthy
We strengthened our financial position further, and have a
higher equity ratio and lower net debt than the previous year, and
previous quarters. This creates stability, and the scope to make
Strategic 5G deals
We've been selected to deliver 5G data management software for
two of the world's largest operators, based in North America and Germany. We won these contracts in fierce
competition with several major system vendors, thanks to our unique
solution for data management in 5G networks. We expect these new 5G
contracts to generate substantial revenue over a five-year period
as project milestones are achieved and the 5G subscriber base
expands. Our new products are compliant with the standalone (SA) 5G
standard. A survey in the spring revealed that 37 percent of
responding operators plan to launch 5G SA networks over the next
two years. Our 5G contracts in North
America and Germany will be
important references for future business with new customers.
Video traffic setting increased demands on telecom
Continuing traffic expansion on mobile networks is persuading
many operators to invest in sophisticated video optimization
solutions to enhance user experiences, and tailor traffic to
available network capacity. One of our customers is Vodafone
Ireland, which thanks to our video optimization technology, has
realized clear network performance improvements. Zain Kuwait is another telecom operator that
selected our video optimization software platform. In the same
region, one Egyptian customer has recently placed an order for a
new traffic management solution, which it will start installing in
the second-half-year this year. I'm delighted to see our customer
base expanding, and we continue to invest to consolidate our market
leadership in video optimization.
Traffic intelligence-crucial for cybersecurity
Traffic intelligence is a core technology across a raft of
different applications including sophisticated cybersecurity
solutions, enabling rapid threat detection and response. We have a
broad customer base in this segment, and are continuing to secure
new customers, one example being German company Genua, which has
selected Enea as a vendor in competition with other specialists in
this segment. The business model of this agreement, like most of
our contracts, is based on revenue that grows as customers succeed
and the usage of our software increases.
Our target of an operating margin over 20 percent remains.
Uncertainty in the short to medium term has increased because of
the corona pandemic. Its after-effects are very likely to continue
to delay projects and impact our business negatively in other ways,
risking fluctuations in our earnings over forthcoming quarters. We
still take a positive view of market prospects for software in
telecom and enterprise networks. We see potential for our new
solutions in virtualization, cybersecurity and 5G, which is why we
are maintaining our investments in product development and
innovation for long-term organic growth. In addition, we are
continuing our search for potential acquisitions that can
strengthen our market position, and long-term earnings capacity.
However, overall, we do believe that the consequences of the corona
pandemic will have a negative impact on our sales in 2020.
The full report can be found as an attachment in this press
release and published on www.enea.com.
Press and analyst meeting
Press and financial analysts are invited to a press and analyst
meeting where Jan Häglund, President and CEO, will present and
comment on the report.
Time: Thursday July 16, 2020 at
8:30 am CEST.
This information is information that Enea AB (publ) is
obliged to make public pursuant to the EU Market Abuse Regulation
and the Swedish Securities Markets Act. The information was
submitted for publication, through the agency of the contact person
set below, on July 16, 2020 at
7:20 am CEST.
Enea is a world-leading supplier of innovative software
components for telecommunications and cybersecurity. Focus areas
are cloud-native, 5G-ready products for mobile core, network
virtualization, and traffic intelligence. More than 3 billion
people rely on Enea technologies in their daily lives. Enea is
listed on Nasdaq Stockholm. For more information:
For more information contact:
Jan Häglund, President
Lotta Trulsson, Executive
This information was brought to you by Cision
The following files are available for download:
Enea 2020 Q2
Enea PR 200716 Eng Q2
SOURCE Enea AB