Annual Report: continued growth for KMD
In 2017, the KMD Group continued its growth trajectory and increased its top line. Revenue increased to DKK 5.6 billion in 2017. The ambitions of KMD’s strategy, “KMD on more markets,” were realized in a satisfactory manner in 2017, with growth in the Central Government and Private Sector business segments of 7% and 15% respectively. In the Local Government business segment, KMD maintains its business at just above the level of 2016. Earnings before special items continue to look reasonable despite a slight fall compared with 2016. The year also brought further investments and initiatives that are strengthening KMD's competitiveness.
In 2017, the KMD Group continued its work of strengthening and improving its strategic position in the various business segments.
KMD’s top line increases again: In 2017, the KMD Group’s revenue increased by DKK 308 million, or 6%, to DKK 5.6 billion. In the current market, the growth in revenue is considered satisfactory. EBITDA before special items was DKK 1,077 million in 2017, a slight fall compared with DKK 1,102 million in 2016. The reason for the slight fall was costs associated with the completion of major projects.
KMD grows in the Central Government and Private Sector business segments: The Private Sector business segment currently accounts for 27% of the KMD Group’s revenue. In 2017, KMD had revenue of DKK 1,545 million in this segment, up 15% on 2016. In the Central Government business segment, revenue was DKK 1,083 million, up 7% on 2016. This segment currently accounts for 19% of the Group’s total revenue. In the Local Government business segment, revenue was DKK 3 billion in 2017, just above the 2016 level.
KMD’s strategic investments continue: KMD’s investments are guided by the strategy “KMD on more markets,”. As well as investments in own product development, in 2017 KMD also continued its acquisition strategy to help develop the Group. The acquisition of In2media group, renamed Charlie Tango, enhances KMD’s business within digital business development, design and customer experiences.
“We’re pleased that KMD once again managed to increase its top line,” says KMD CEO Eva Berneke. “This is both organic and via acquisitions. Our earnings continue to be reasonable; however, the slight fall compared with 2016 is less satisfactory. The main reason for this fall is that we a handful major IT projects in 2017 that didn't run to plan, which meant extra costs.”
KMD has emerged from 2017 with a net loss. As in 2016, the negative result is mainly a matter of financial reporting, related to depreciation and amortization on purchase price allocations.
KMD following the strategic course
KMD is operating its business in accordance with the growth strategy toward 2022, “KMD on more markets.” This strategy entails KMD maintaining its current strong market position in the Danish local governments as well as increasing its market share within software for private companies and central government institutions across the Nordic market.
“It’s positive that we’re able to show that KMD’s business with central government and the private sector is growing,” says Eva Berneke. “We'd like to grow more in the local governments, but it’s clear that the business outside our historically strong presence in the Local Government segment is extremely important for the strategic transformation that KMD has been undergoing in recent years.
“It’s also pleasing that our Nordic subsidiary Banqsoft is doing well,” continues Eva Berneke. “In 2017, it delivered revenue growth of around 20%. Banqsoft has moved from focusing solely on software for asset financing to providing banking solutions for new banks across borders with a very short time to market. None of our competitors in Scandinavia can match this. As a result, Banqsoft, with its strong product portfolio, was able to attract many exciting customers in 2017.”
Banqsoft’s new customers include the Finnish banking and insurance company Lähitapiola, the Finnish division of Norwegian bank Instabank and Optin Bank in Norway.
Acquisition strategy continues
As part of its strategy, every year KMD makes investments in own product development, supplemented by relevant acquisitions. In 2017, KMD’s market position was strengthened by acquisitions such as In2media group, subsequently renamed Charlie Tango.
“Charlie Tango has added to the KMD Group technological, digital and creative competencies that address the growing demand within digital transformation,” says Eva Berneke. “Charlie Tango’s competencies and services can be used in all our Danish customer segments, and they also have Nordic potential. We have big expectations that they can help enhance our offerings to customers across the Group.”
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KMD is the largest Danish-based IT company, and the majority of KMD's business derives from its own software development. For more than 45 years, KMD has worked on the development, operation and maintenance of Denmark’s biggest IT systems. Today, KMD develops and delivers software and service solutions for local government, central government and the private sector in Denmark. The KMD Group also has subsidiaries in Norway, Sweden, Finland and Poland. By way of example, KMD’s systems handle salary and benefit payments, and every year KMD’s software systems calculate and pay out around DKK 400 billion. This equates to approximately 20% of Denmark’s GDP. KMD's software systems also handle IT support for areas as diverse as schools, utility companies and the holding of parliamentary elections in Denmark. The KMD Group has an annual revenue of around DKK 5.6 billion and around 3,500 employees. KMD is owned by Advent International and Sampension. Read more at www.kmd.dk.
KMD, Press Officer Christoffer Hellmann, mobile (+45) 25 29 17 84, firstname.lastname@example.org