Anoto, CEO Stein Revelsby (CEO) – In the short term we expect a significant improvement in revenues

Posted: 9 December, 2014 in Anoto, Published Investment Calls
Tags: , , , ,

Anoto Group AB is a global leader in digital writing solutions, which enables fast and reliable transmission of handwriting into a digital format. Anoto operates worldwide through a global partner network that delivers user-friendly digital writing solutions for efficient capture, transmission, distribution and storage of data. Anoto is currently in use across multiple business segments, e.g. healthcare, banking and finance, transportation and logistics and education. The Anoto Group has around 100 employees and is headquartered in Lund (Sweden). The company also has offices in Basingstoke and Wetherby (UK), Boston (US), Los Angeles (US) and Tokyo (Japan). The Anoto share is traded on the Small Cap list of NASDAQ OMX Stockholm under the ticker ANOT.

In person, the author (CESI) relatively recently attended this Redeye investor forum (Gothenburg, October 16):

http://www.redeye.se/webcast/investor-forum-14-oktober-anoto (VIDEO in Swedish, October 14)

The author CESI appreciated the CEO Stein Revelsby´s presentation and especially the following comments (depicted, edited and translated verbal comments from the link above):

“To be a share holder in Anoto has been equivalent to bad business, but we will not give up until we will deliver a success”

”Panasonic is not a small shit business…”

”in Los Angeles, we have frequent office visits by Dreamworks, Disney och Adobe and there we have positioned ourself amongst all the big players – this would not be possible working in/from Lund”

“We are totally dependent of choosing a partner (company) that has a well established market share. In this case, we only need one customer to secure a 10% market share. If we achieve that, business will be fantastic”.

Some additional interesting CEO comments in the most recent “red number Q3 Quarterly report” (of course, and as always, with a bullish CESI perspective). http://www.anoto.com/media/1546/anoto-quarterly-report-en-q3_14_final.pdf

“Revenues in the third quarter was MSEK 27.1 compared to MSEK 31.3 for the second quarter. Gross margin was 65% compared to 63% in the second quarter. Operating expenses were MSEK 34.7 in the third quarter compared to MSEK 36.8 in the second quarter. EBITDA was MSEK –20.7 compared to MSEK -17.3 in the second quarter. Cash flow for the quarter was MSEK -11.4, including MSEK 3.7 of net payment from the private placement in June/July and MSEK 2.8 from a short term loan in September. The 3rd quarter was another weak quarter with respect to sales for Anoto and we had to ask our shareholders for funding once again. The rights issue is guaranteed to 90% by a consortium of Swedish investors and will provide 68 MSEK in cash before transaction costs and fees to underwriters if fully subscribed. Despite a weak quarter we took another major step towards growth and profitability by developing a successful prototype for one of the world’s largest IT companies. The project is progressing well with the objective to launch a high end digital writing solution for displays in the second half of 2015. This follows a successful product launch with Panasonic which has opened up for new opportunities to become a digital writing platform for display manufacturers who are looking for high precision, easier integration with touch technologies, larger displays and the possibilities to use more than one pen per screen. The negotiations announced on June 19th about divesting our Business Solutions business was terminated in August. The purpose of the proposed transaction was to realize the full potential of the business solutions segment with a strategic partner to enable a stronger marketing and sales presence. However we did not come to agreement on price and decided instead to consolidate all our wholly owned digital paper based business solutions business into a separate business unit, Anoto Enterprise Solutions in the UK. Anoto Enterprise Solutions will continue to support customers in the UK and also Business Solutions partners world-wide. During the 3rd quarter several larger opportunities has evolved within healthcare, banking, insurance and field service in Germany, UK, Turkey and Japan. We continue to focus on costs and we did further adjustments to reduce OPEX in Q3 by deciding to close our office in Holland and move all Business Solutions related activities to the UK. We see further potential to reduce costs in 2015 but we are cautiously aware that we do not want to reduce the upside revenue potential of our business. Once the lease expires we will move the Swedish organization to a new office in Lund from September next year which will reduce the operating expenses.

OUTLOOK

Following Panasonic product launch and now significant interest from some of the world’s largest IT companies Anoto’s strategic direction will shift to capitalize on its unique position as the leading provider of high precision digital writing solutions for small as well as ultra-large screens and the rapidly increasing demand for collaboration solutions. Initial market focus will be on high end market segments where users demand high accuracy, fast and reliable interaction and multiple users per screen. Touch Display Research estimates that active digital pen shipments will surpass 90 million units this year and increase to more than 500 million pens in 2020. By working with some of the world’s leading brands we see a large opportunity to participate in this market. In the short term we expect a significant improvement in revenues in the coming two quarters both within Business Solutions from ongoing projects as well as within our OEM business with customers Livescribe, Smartmatic, Tstudy, Steelcase and others.

 

BUSINESS SOLUTIONS

Business Solutions focuses on systems, products and services that target businesses, primarily in the field of forms processing and data capture. The offering is Pen Solutions which includes solutions for creating a form in digital format, digital processing of handwritten forms and automatic generation of a digital version of a document with handwritten signatures and notes. Anoto has an indirect business model and markets its products through partners, such as system integrators, software developers and IT consulting firms, all of which offer customized solutions with Anoto technology to their customers. Net sales during the period were MSEK 66, which is MSEK 6 below net sales during the same period last year. We shipped approximately 3,000 pens to partners and customers within business solutions in this quarter. The negotiations announced on June 19 about divesting our Business Solutions business was terminated in August. We did not come to agreement on price and decided instead to consolidate all our wholly owned digital paper based business solutions business into a separate business unit, Anoto Enterprise Solutions in the UK. The potential transaction took significant management resources and attention which hurt our business. During the quarter we took immediate measures to reduce OPEX within business solutions by 5 MSEK on an annual basis, including a decision to close our sales office in Holland. Further optimization and cost reductions will be considered for 2015.

EMEA

There were no larger deals in the quarter. The pipeline looks strong for the coming two quarters especially in Germany and the UK. The Nursing Tech Fund 2 is expected to be announced before year end. The successful roll-out of 1,100 pens in combination with iPads to the large bank in Q2 has reached the industry press and more financial institutions are evaluating our solutions.

INDIA

Our business development efforts in India are paying off resulting in the first 100 pens of a roll-out in total of approximately 2,200 pens and Anoto Live Forms in the services sectors.

TECHNOLOGY LICENSING (OEM SALES)

Customers within Technology Licensing develop and sell products based on our intellectual property, software, and digital pen products. For many years, Anoto has licensed its technologies to providers of interactive classroom solutions as well as learning aids for children. Productivity tools, such as for note-taking and meeting productivity, are also long-established products in our Technology Licensing segment. Recently, Anoto has established two new application areas through partners: voting solutions and digital design automation. Voting solutions are based on our traditional digital paper technology, while digital design automation solutions help animators and designers unleash the creative power of digital writing with interactive touch displays.

Net sales during the period were MSEK 23, which is MSEK 7 lower than the same period last year.

In Q3 we delivered 5,000 pens to partner Steelcase for interactive whiteboard solutions and 5,000 pens to Tstudy China. Livescribe sold approximately 45,000 pens in the quarter. No significant deliveries were made to other OEM partners in the quarter. Anoto has ongoing discussions with new partners and has noticed a significant increase in interest for the company’s technology, especially in the wake of the company’s partnership with Panasonic. We invoiced the first Non Refundable Engineering contract for the successful development of a prototype for one of the world’s largest IT companies. The project is progressing well with the objective to launch a high end digital writing solution for displays in the second half of 2015.

C TECHNOLOGIES

C Technologies develops, manufactures and sells C-Pen®, a handheld scanner solution with character recognition software. The C-Pen captures printed information such as text, numbers and codes, decodes the information and transfers it to computers and smartphones. The products are made available through the C-Pen brand and as OEMbranded versions. Net sales during the period were MSEK 6 which is MSEK 1 higher than during the same period last year. The business was downsized during last year. C Technologies continues to sell its products to OEM customers as well as within select retail channels.

RISK FACTORS AND UNCERTAINTIES

At the close of the quarter, the group’s total cash amounted to MSEK 1.9 which is a decrease by MSEK 5.1 compared to year-end of 2013. Anoto’s current working capital is not sufficient for the Company’s needs for the next twelve months. The Company believes that if the Company’s earning capacity is not improved, the capital injection of up to SEK 68 million before costs from the rights issue is not sufficient to cover the estimated capital need. In that case, the Board intends to submit a proposal to issue new shares at a general meeting. Based upon this the Board believes that the financial statements shall be prepared applying the going concern principle*. The Convertible loan issued in June this year will mature at the end of February next year. Should full conversion take place there is a possible cash flow upside of up to 16.3 MSEK

*The going concern principle is the assumption that an entity will remain in business for the foreseeable future. Conversely, this means the entity will not be forced to halt operations and liquidate its assets in the near term at what may be very low fire-sale prices. By making this assumption, the accountant is justified in deferring the recognition of certain expenses until a later period, when the entity will presumably still be in business and using its assets in the most effective manner possible. http://www.accountingtools.com/going-concern-principle

Anoto Digital Pen solution for Education (Mars 29, 2014)

https://www.youtube.com/watch?v=VPTYWhFH7f8 (VIDEO)

Anoto Digital Pen solution for Healthcare Industry (Mars 29, 2014)

https://www.youtube.com/watch?v=pFNZtCmBPDc (VIDEO)

Anoto Digital Pen solution for Facilities Management (Mars 29, 2014)

https://www.youtube.com/watch?v=6SgDq8-Pfp4 (VIDEO)

Anoto Digital Pen solution for Pharmaceutical Industry (Mars 29, 2014)

https://www.youtube.com/watch?v=MYWSK-LFSpI (VIDEO)

Two weeks after the Gothenburg visit, the CEO Stein Revelsby presented at Investor forum in Stockholm:

https://www.youtube.com/watch?v=lKueuSnqWgE (VIDEO in Swedish, October 29)

…and then again in November 24…

http://www.redeye.se/webcast/technology-seminar-2014-anoto (VIDEO in Swedish, November 24)

ViktorWestman at http://www.redeye.se has recently published a very extensive high quality Anoto analysis:

http://www.redeye.se/analys/today/anoto-smartmatics-war-chest-increases-usd-140-million

In the link attached above, press the big red button for the full english version. It is well worth a read.

CESI concludes with an an Anoto commercial, a few selected full press releases and a few additional links:

https://www.youtube.com/watch?v=M6-DLge5Hes (VIDEO)

Press releases:

Anoto completes rights issue and secures funding of SEK 61.3m (Nasdaq OMX)

2014-11-13 08:30
Lund, November 13, 2014 — The subscription period in Anoto’s rights issue is now over and the rights issue was subscribed to 90 per cent, equivalent to SEK 61.3m. In the rights issue, 245,000,000 new shares were issued at a subscription price of SEK 0.25 per share, equivalent to SEK 61.3m. Shares for approximately SEK 43.4m have been subscribed for with preferential rights. In addition, shares for approximately SEK 2.9m have been subscribed for without preferential rights. The remaining SEK 14.9m was subscribed for by the underwriters of the rights issue. In total shares corresponding to 90 per cent of the rights issue were subscribed for, corresponding to SEK 61.3m The rights issue has increased the number of shares of Anoto by 245,000,000 shares to 698,353,534 shares. The capital of Anoto has simultaneously increased by SEK 4,900,000 to SEK 13,967,071. Shareholders subscribing with preferential rights have received BTA1 (paid subscription shares). Investors subscribing without preferential rights will receive BTA2 (paid subscription shares). Notice of allotment of shares subscribed for without preferential right will be distributed shortly. “With the funding secured we can now fully focus on the opportunities that lay ahead of us. Our recent deal with T-Systems clearly shows the momentum of our organisation and we are confident to reach new heights in the year to come.” says Stein Revelsby, CEO of Anoto.

T-Systems enhances signature capture solutions for Telekom Shop mbH in Germany with Anoto Live Pen 2 (Nasdaq OMX)

2014-11-06 08:30
Successful, easy and cost-efficient solution migrates to Virtual Desktop environment Lund, Sweden – 6 November 2014: Anoto, the world leader in digital writing technology, today announced that T-Systems has signed a contract to migrate the Group’s 800 Telekom Shops to Anoto’s recently released Live™ Pen 2 and Anoto Live™ software solutions as part of a program to move to a Virtual Desktop environment. Anoto Live™ digital writing solutions are at the core of the mobile plan contract signing and archiving solution at all Telekom Shops in Germany. Paper processes are streamlined and critical data is securely managed, improving efficiency across the enterprise whilst enhancing the customer experience. Customers signing up for service are required to sign contracts that must be securely captured and archived, in addition to supplying the customer with a copy of the agreement. Millions of forms are processed each year. In operation since 2008, Telekom Shop utilizes 5,000 digital pens and Anoto Live™ software solutions to process approximately 6 million pages per annum, and flawlessly handle 14 signatures and 166 views per minute. With Anoto Live™, Telekom customer’s enrolment forms are completed and signatures captured with an Anoto digital pen in the shops which is then transmitted to their data centre. Customer data is processed quickly and efficiently, often taking just minutes from signature to archiving. This solution eliminates scanning and postage costs, guarantees data security and confidentiality, and ensures customer contracts are always correctly signed and dated. The bottom line is that the Anoto digital writing solution has allowed Telekom Shop to cut contract printing by 50%. As part of a program to further streamline the business, the existing virtual working environments at the Telekom Shops are being migrated using most recent Citrix technologies. In order to support this new environment the existing Live Pen 1 software and hardware will also be migrated in order to support the new platform and communications protocols within the Citrix environment. “We are very excited to continue using the successful digital pen technology in our Telekom Shops.” said Dr. Wolfgang Weniger, Vice President Retail Processes and Systems of Telekom Shop Vertriebsgesellschaft mbH “. In addition to the significant cost savings, our employees are able to spend more time with customers and less time processing forms, increasing customer satisfaction. Applying the newest Anoto technology in our operations underlines our frontrunner position with new and innovative products.” “Digital pen technology can make a real difference to the way retail handles data and documents,” said Stein Revelsby, CEO of Anoto. “A highly dynamic operation like Telekom Shops handles a vast amount of documents daily where it is essential to capture and store customer signatures correctly. Many retail and logistics operations have the same requirement. Telekom Shops is a fantastic example of a successful organization which has adopted our technology resulting in dramatic cost savings, increased data security and customer satisfaction. This project confirms our commitment to bring value to our customers with existing and new products and services.”

Anoto Announces Order from Geeks Network (Nasdaq OMX)

2014-10-17 14:09
Lund, Sweden – 17 October 2014. Anoto, a global leader in digital writing solutions, is pleased to announce that it has received an order for a minimum of 1000 Anoto Live™ digital pens and the accompanying Anoto Live™ software from Geeks Network (P) Ltd. The order will be delivered in full before June 30th, 2015. The first shipment has already been made. Based in Chennai (India), Geeks is a rapidly growing young company that focuses on providing “Last Mile Consumer Support” solutions to its customers in the Food & Beverage, Hospitality, Healthcare and Public Services segments. After experimenting with several digital data capture methods, Geeks selected the Anoto solution as they were convinced it was the “best fit” for their particular requirements – from the perspectives of technology, ease of use, and economics. By using Anoto’s technology, Geeks’ analysis services to their customers will dramatically improve with much faster response times. ”Digital pen solutions is a robust alternative for data capture in the field or when there is a need for paper copies of business-critical documents,” said Stein Revelsby, CEO of Anoto. “We are pleased to see that our business development efforts in India that was initiated last year is starting to show results.”­­­ For further information, please contact: Stein Revelsby, CEO Tel. +46 (0)733 45 12 05 Anoto Group AB (publ.) Box 4106 SE-227 22 Lund Tel.: +46 46 540 12 00 http://www.anoto.com

Miscellanuous links:


Updated December 16, 2014: 

The advancing innovations and trends of voting technology

http://e-lected.blogspot.se/2014/11/the-advancing-innovations-and-trends-of.html


Updated December 16, 2014: 

Digital Pen Review

http://digital-pen-review.toptenreviews.com/


Anoto Digital Pen for Panasonic ToughPad 4K – Focus (September 7, 2013, VIDEO)

https://www.youtube.com/watch?v=-EHI1UdNLKQ

http://www.redeye.se/analys/report/anoto-redrawing-map-0

https://www.avanza.se/placera/redaktionellt/2014/12/09/potential-i-pyttebolag.html (December 9, in Swedish)

http://www.redeye.se/aktiebloggen/anoto/decenniets-turnaround-0 (December 8, 2014, in Swedish)

http://www.redeye.se/aktiebloggen/anoto/decenniets-turnaround (January 12, 2014, In Swedish)

https://fortune.com/2014/12/08/is-apples-next-product-the-stylus-steve-jobs-said-nobody-wanted/

Anoto – A decent risk reward? Time will tell…

Good luck Anoto!

Best regards, CESI

The author, Cutting Edge Science Invest, is currently an Anoto share holder. Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered. Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”. The article/post does not contain professional investment advice. 

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