Interim Report, First Quarter of 2017

STOCKHOLM, April 25, 2017 /PRNewswire/ --

January – March 2017

•  The operating result for the period improved to SEK -23.2 million (-24.1), an improvement of 4 %
  
•  Loss after tax for the period improved to SEK -25.2 million (-25.6), an improvement of 2 %
  
•  Earnings per share SEK -0.43 (-0.55), an improvement of 22 %
  
•  Cash flow before changes in working capital improved with SEK 1.3 million to -20.15 (-21.8), an improvement of 6 %
  
•  Net sales for the period SEK 62,5 million (61.1), an increase of 2 % compared to same period last year
   

Significant events during the period January – March 2017

• Seqr partners with Facestore launching in 25,000 online stores in Portugal. This partnership will provide merchants using the Facestore distribution platform to offer the Swedish payment option to its customers - not only does Seqr provide merchants with the lowest transaction costs in the market, but also benefits consumers with a new secure and easy way to pay.
  
  
• MeaWallet technology has enabled customers of the Serbian bank Komercijalna banka, also called Kombank, to perform contactless transactions at POS terminals. The bank launched this new feature on the 2nd February, 2017 to their mobile banking application, KOMePay
  
  
• MeaWallet partners with Crossgate to provide HCE/Cloud based mobile payments technology for their customers in Africa. Implementation will commence with one of Crossgate's customers in Q1 2017, with the installation of full functionality to be completed by the end of 2017. The project will run out of South Africa initially to be rolled out to the rest of the African continent thereafter.
  
  
• Swedes can pay contactless with their smartphone all over the world using Seqr ™. First to the Swedish market to launch contactless payments technology – Seqr ™ is enabling consumer payments at over 30 million retailers.
  
  
• Seamless arranged a fixed income debt financing amounting to app. 30 MSEK in January 2017
  
  
• Seqr™ launches Seqr Go!™, the first of its kind prepaid mobile payment app designed mainly for teenagers. The application provides a secure alternative to carrying cash and/or cards and is quick and easy to get up and running.
  
  
• The Board of Directors of Seamless Distribution AB proposes a divestment of the subsidiary Seamless Distribution System AB. The divestment is envisaged to be carried out either (i) through a purchase offer and subsequent listing of the SDS share on Nasdaq First North or (ii) to a third-party buyer.
  
  
• Albin Rännar will become the new Vice President and CFO of the subsidiary Seamless Distribution Systems (SDS) His task will be to strengthen the work of preparing the company for the proposed spin-off and continued profitable growth as a stand-alone company.
  
  
• Seqr™ integrates Masterpass to create the first digital wallet for shopping in all channels across multiple markets. During the second quarter of 2017, Seqr customers will benefit from being able to shop and pay at hundreds of thousands of online stores, wherever Masterpass is accepted, globally

Significant events after the close of the reporting period

• Seamless Distribution Systems (SDS) announces the launch of Micro Credit service for resellers of mobile airtime.

CEO´s COMMENT 

Dear Shareholders,  

The Seamless Group continues its positive trend with a 22 % improvement in EBITDA. We see further positive trends in our individual group companies, especially Seqr where revenue grew with 82 %.

SDS enters microfinance, making a difference in developing worlds
SDS, which tends to have a weak first quarter, improved their revenue with 22 % year on year. The net result improved with 24.5 %. We expect an accelerated growth in SDS with the traditional business developing satisfactory. Going forward, SDS is entering into a highly specialized field of microfinance in Africa. SDS has access to a large amount of data which allows us to credit-score hundreds of thousands resellers of airtime all over the continent. This means that SDS can offer a service which allows resellers and operators to increase sales due to a more streamlined process for refill of the reseller's inventory.
This means that resellers don't have to spend unnecessary time and effort to top up their inventory during the day. We are pleased to be able to offer this new product, which is only possible due to SDS's ability to use data in innovative ways and can improve the lives of thousands of small business owners who have previously had no access to credit products. At the same time, as we feel proud to be able to offer potentially life changing services, we also feel that this type of microfinance has the potential to become SDS's largest source of profit.

E-products lost revenue but continues increasing efficiency
E-products have lost revenue due to a market dip for pre-paid top up in the Scandinavian region. As the work continues to make our processes fully automated and efficient, the operating result, despite the decrease in revenue, improved with 35.5 % to a loss of 928 thousand SEK. E-products is developing its product portfolio and increasing the number of digital products it can offer through its network which we believe will increase the revenue and net result going forward.

Revenue for Seqr accelerating with 82% growth
The revenue for Seqr grew with 82 % year on year and we expect this growth to accelerate further during the year. Our move into contactless payments seems to be paying off as the growth in transaction volumes largely emanates from contactless payments all over Europe. Our daily transaction volume in Germany has for example increased over 350 % during the last quarter. This exponential development has continued unabated in the period between the end of Q1 and the date of this report. If this growth continues, Germany will soon be our largest market.

Continual product evolution with Seqr Go! And Masterpass
During the quarter we released some very important news including, but not limited to, the release of Seqr GO!, a payment and transfer app specifically targeted towards kids and teenagers, and our cooperation with Mastercard regarding their Masterpass checkout system. The Mastercard cooperation gives Seqr users the ability to shop and pay at 340 000 on-line retailers all over the world.

Because the AGM on the 20th of April decided to give the company the mandate to divest SDS, we expect to have a favorable financial situation going forward from a large inflow of cash coming from the sale of SDS. This divestiture will focus and position the company on making money on the increasing digitalization of the global consumer.

The non-digital consumer is disappearing with an increasing speed and cash usage when shopping in physical stores is dwindling fast in most countries. At the same time, online shopping is increasing in accelerated manner. In this development Seamless is very well positioned. We are poised to profit on both consumer demand for Seqr as well as demand from other financial institutions for technology developed by MEA Wallet, which enables them to offer their clients the ability to pay via electronic means through the mobile.

If one believes that the global consumer is going to be ever more digitalized, then one should own shares in Seamless.

Best Regards,

Peter Fredell,
CEO Seamless

This is the type of information that Seamless Distribution AB (publ) is required to disclose pursuant to the Securities Market Act and/or the Financial Instruments Trading Act. The information was submitted for publication on April 25, 2017 at 08:50 a.m. (CET).

For further information, please contact:
Peter Fredell
CEO
[email protected]
+46-8-564-878-00

ABOUT SEAMLESS
Seamless is one of the world's largest suppliers of payment systems for mobile phones. Founded in 2001 and active in 39 countries, Seamless handles more than 5.3 billion transactions annually through 675 000 active sales outlets. Seamless has three main business areas including the SDS/transaction switch, the technology provider for the distribution of e-products and the mobile payment platform SEQR. Seamless shares are traded on NASDAQ OMX Stockholm www.seamless.se

The Seamless Interim Report 2017 for the period January – March 2017 has been approved for publication by the Board of Directors, by its decision on April 24, 2017. This financial report has not been subjected to a review by the Company's auditors.

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SOURCE Seamless Distribution AB