The year has progressed well, with a 22% increase in our recurring revenues - almost 6% of which is organic and accounts for 79% (73) of total revenue. We currently have 23 operational business units, compared with 18 last year at the same time. We invested SEK 139 million in our product portfolio and we have increased the number of employees. We have completed 5 acquisitions during the year, which added about SEK 160 million in annual sales.
Our primary focus is on increasing our recurring revenues through acquisitions, as well as organically. This approach provides stable cash flows that enable us to consistently strengthen our offering, to be a key provider to our customers and by extension, to contribute to increased efficiency and value generation in the social economy. Through our acquisitions we operate in a growing number of niches, which spreads risk but also increases our responsibility for important functions in our daily lives. For example, our products can be found in pharmacies, banks, health care, insurance and education.
We continue to invest in our corporate culture through internal training programs and introduction conferences. A common corporate culture is essential to achieve success with our decentralized governance model.
Our non-recurring licensing revenues declined by 49%, which is completely in line with our consistent strategy and business model. The non-recurring revenues that disappeared, about SEK 17 million this year, have a short-term negative impact on earnings compared with the previous year, but will soon be replaced by recurring revenue, although not immediately. The changed business model has resulted in cost reductions, albeit also with some delay.
We are engaged in a large number of active acquisition dialogs, and we are continuously allocating resources to stay abreast of and advance these dialogs. Our financial position is solid and we are well prepared for future acquisitions and for continued acquisition-based growth. Supported by our acquisition of well-established companies and a high and increasing percentage of recurring revenues, Vitec will stay its course - to be a vertical software company with excellent risk diversification and sustainable, profitable growth - and thereby increase our dividends for the eighteenth consecutive year.
Lars Stenlund, CEO
For more information, please contact:
Lars Stenlund, CEO Vitec Software Group AB (publ), +46 70 659 49 39
Olle Backman, CFO Vitec Software Group AB (publ), +46 70 632 89 93
Patrik Fransson, IR Officer Vitec Software Group AB (publ), +46 76 942 85
This information is information that Vitec Software Group AB (publ) is obligated to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out abowe, at 08:00 CET February 13, 2020.
Vitec is market leader for Vertical Market Software in the Nordic region. We develop and deliver standard niche software. Vitec grows through acquisitions of well-managed and well-established software companies. The Group's overall processes together with the employees' in-depth knowledge of the customer's local market enables continuous improvement and innovation. Our 750 employees are based in Denmark, Finland, Norway and Sweden. Vitec is listed on Nasdaq Stockholm and had net sales of SEK 1 156 million in 2019. Find more at www.vitecsoftware.com.
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