LINK Mobility - Fourth quarter results 2022
LINK Mobility (LINK) reports all-time high revenue of NOK 1,525 million, increasing 18% in the fourth quarter of 2022. Organic revenue growth in fixed currency was 12%. All-time high gross profit of NOK 400 million and all-time high adjusted EBITDA of NOK 188 million, grew by 11% and 7% respectively. LINK expects improved growth and profitability in 2023 with accelerated momentum for new business wins during 2022 and previously announced cost reduction initiatives partly offsetting underlying cost increases. Gross profit growth is expected to be higher in 2023 than in 2022 and opex savings to increase profitability further. LINK's new forward-looking statement for 2023 is for organic adjusted EBITDA growth of 12-15% in fixed currency.
Opex reductions announced last summer have progressed ahead of target and are expected to increase profitability by NOK 60 million in 2023 as compared to 2022. The annual run rate opex reduction in Q4 23 is now estimated at NOK 84 million compared to previous forecast at NOK 52 million. Capex reductions are expected to increase free cash flow in 2023 by NOK 25 million as compared to 2022, with an annual Q4 23 run rate reduction estimated at NOK 32 million.
LINK's contract backlog increased significantly in the second half of 2022 as refocused commercial activities increased inflow of new business. The forecasted annual gross profit contribution from new contract wins, not including the US, increased by 63% in H2 22 YoY. LINK also gained traction in the US with a high order backlog for messaging solutions and a broader exposure to critical events messaging across many states. LINK recently signed two new large 3-year utility contracts with committed revenue of USD 7.6 million, not including unquantifiable critical events messaging revenue. There is large potential to further scale revenue in the US.
Reported revenue increased 18% to NOK 1,525 million in the fourth quarter YoY, with organic revenue growth at 12% in fixed currency. Driven by a significantly improved contribution from the US with 91% revenue growth, Global Messaging revenue growth of 64% and a rebound in European retail spend from unusually low levels in the previous two quarters.
Gross profit grew 11% to NOK 400 million in Q4 22, with an organic gross profit growth in fixed currency of 5%. The deviation between revenue and gross profit growth reflected a higher contribution Global Messaging, a low margin aggregator business, and the absence of high margin covid traffic observed in same period the previous year.
Adjusted EBITDA increased 7% to NOK 188 million in the fourth quarter, with an adjusted EBITDA margin of 12.3% (13.6%). Ongoing opex initiatives will support growth and margin in 2023.
"We are happy to report all-time high figures in the fourth quarter of 2022 and to observe a positive profit trend into 2023. The commercial refocus last year has led to a significantly higher contract backlog and increased cost reductions are delivered ahead of schedule", says Thomas Berge, Interim CEO of LINK.
The quarterly results will be presented in an audio webcast at 10:00 CET today by Thomas Berge, Interim CEO and Morten Edvardsen, Interim CFO.
The audio webcast targets investors, analysts and media. Attendees will be able to post and ask questions directly in a Q&A session following the webcast.
To join the audio webcast and post questions, please go to
https://channel.royalcast.com/landingpage/hegnarmedia/20230216_19/
The webcast is also available from LINK's investor relations pages
https://linkmobility.com/investor-relations/
To ask questions directly in the Q&A session, please dial in
PIN Code for all countries: 799682
NO: +47 21956342 DK: +45 7876 8490 SE: +46-4-0682-0620 UK: +44 203-7696819 US: +1 646-787-0157
For further information, please contact
Tom Rogn, VP Investor Relations +47 94 85 56 59 tom.rogn@linkmobility.com
About LINK Mobility
LINK is an award-winning, leading global provider of mobile messaging and communications platform as a service (CPaaS) solutions for increased engagement. The company serves enterprise, SME, and government customers. LINK offers a wide range of innovative and scalable mobile solutions, creating valuable digital convergence between businesses and customers, governments and citizens, platforms and users. LINK has 50,000 customer accounts globally and exchanges more than 15 billion messages a year. LINK is listed on the Oslo Stock Exchange under the ticker LINK. For more information about LINK, please see www.linkmobility.com and follow LINK Mobility on LinkedIn.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.