Span Publishes FY 2022 Results

During FY 2022, Span recorded an increase in sales revenue of 12% YoY, strong EBITDA growth of 64.1%, and a net profit increase of more than 2x.

The total consolidated revenue of Span increased by 12% (or HRK 93m) YoY. Of this, operating revenue grew by HRK 62.5m, of which revenues in the segment of IT services with high added value increased by HRK 100.7m, whereas revenues in the segment of software asset management and licensing recorded a decline of HRK 38.2m. The decline in revenues comes from the fall of revenue in the Ukrainian market given that Microsoft has enabled Span’s users in Ukraine the use of its products and services without compensation, in the period from 1st April until 12th 31st December 2022. Consequently, TOV Span (subsidiary in Ukraine) reported a write-off of debts towards Microsoft – reflecting in HRK 30.5m of Other revenues.

Breaking the revenue down into segments, the largest absolute increase was recorded by Infrastructure Services, Cloud & Cyber Security, which increased by HRK 40.4m, or 49% YoY. Following them, we have Service Center Management and Technical Support, which increased by HRK 32.7m, or 35% and Software and Business Solution Development, which increased by HRK 27.6m, or 62% YoY.

Meanwhile, OPEX grew by HRK 69.6m (or 9.3% YoY) and amounted to HRK 816.8m. Of this, Staff costs increased the most, by HRK 55.7m, or 40.2% YoY. This came as a result of a much higher number of employees. Further, we emphasize that the growth in staff expenses follows an increase in revenues in the segment of IT services with high added value. Higher growth in staff expenses is somewhat of CAPEX for an IT company like Span, which is something that should be considered when looking at staff expenses – it should not be “just” be considered as a pressure on margin, rather than an investment. The average number of employees in the FY 2022 amounted to 704, which is an increase of 31.1%, or 167 new employees YoY on average. As expected, most of the newly employed were hired in the mentioned high-added value segments. Finally, COGS slightly decreased by 5.3% of HRK 30.6m.

EBITDA increased significantly, growing by HRK 27.3m or 64.1% compared to 2021, mainly as a result of higher revenue from IT services with high-added value, which is something that the Company wants to focus on. Further, below the operating level, the net financial result amounted to HRK -1.4m (from a net gain of HRK 1m in 2021) due to FX losses of HRK 7.5m. Overall, the Group managed to increase EBT by as much as 75.7% YoY, amounting to HRK 49m.

Span key financials (2022 vs. 2021, HRKm)

Source: Span, InterCapital Research

Moving on to the balance sheet, the total assets of Span on 31 December 2022 amounted to HRK 414m, an increase of 17.7% YoY. This was mainly driven by growth in Goodwill in the Group’s long-term assets due to the acquisition of Ekobit during the second half of the year. This was further amplified by growth in current assets due to higher receivables.

Finally, we note that besides the strong results achieved by the Group, Span established the Cyber Security Center in July with the goal of providing software for cyber protection. This center is the only of its kind in this part of Europe that offers defense from cyber-attacks. 

Domagoj Grčević
Category : Blog

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