From the CEO

We enable payments - globally

From the CEO

We have improved our performance during the first quarter, but it is still far from satisfactory. Compared to the previous quarter, sales started to pick up (+13 %). The operating result is still negative but was improved by MSEK 4.4 during the same period. Our gross margin continued to increase, exceeding 63 % for the first quarter (+2 p.p. compared to the full 2018). As we are getting back on the growth path, this strength in our business model will be a key driver for profitability.

Our focus remains on growth and sales while also maintaining a strong gross margin. We have recently taken measures to adjust our organization which will have a positive impact on our operating cost by MSEK 3 on a yearly basis.

I am very pleased that we continue to be selected by premiere business partners for our new world class products. During the first quarter we completed the development of the next generation self-service kiosk. The first kiosks are now in operation at Max’ flagship restaurant in Luleå. In parallel, we are working with Max further helping them to improve the customer experience and increase sales. This work includes new innovative self-service concepts for both outdoor and mobile use (“que busting”). The latter application is something Westpay can deliver due to our unique Oracle partnership.

Our status as a Gold Level member and strategic partner for payment solutions within the Oracle Partner Network (OPN) carries on. Recent direct results includes the new partnerships with HRS and Micros South Africa. In both these partnerships, Westpay will deliver integrated payment solutions for customers in the hotel and restaurant sectors.

HRS is an international market leader in IT for the hospitality and retail industries, and the largest Oracle Hospitality Platinum Partner worldwide. HRS’ impressive client list is made up of more than 3000 hotels, restaurant enterprises and trading companies located across the globe.

In South Africa we have signed a contract with Micros (part of Adapt IT), the largest Oracle hospitality partner in the south African region. With a client list made up of more than 700 hotels, 3 500 restaurants, Micros is a truly international and leading provider of Hospitality Solutions in the region.

As a final note on the Oracle partnership, I am very proud to see that the leading Swedish restaurant operator, Nobis Group/Opera- källaren has chosen payment solution from Westpay AB for all their restaurant operations at Friends Arena. The payment solution builds on Westpay’s Classic and Carbon product ranges with integration to Oracle Point-Of-Sales (POS) systems.

Cards and mobile payments are gradually pushing the use of cash downward across the globe. According to McKinsey, cash as a share of total payments was declining from 92 percent in 2006 to 84 percent in 2016. Generally, consumers in wealthier economies tend to favor noncash alternatives. Cash usage in Sweden, Finland, the UK, the Netherlands, Canada, France, and the United States has fallen well below 50 percent of total transaction volume. In Northern Europe, as few as one in every five payments is made in cash and using cash is increasingly becoming difficult in stores and restaurants. I strongly believe our product offering support this market change.

We are making progress; however, a lot of hard work remain to be done. We will continue with actions in order to improve Westpay´s future performance. Because of this I remain confident that we are well positioned with the right business focus, team size and technology offerings to extend our five-year historic growth journey well into the future. My ambition during 2019 is to continue the intensive work with technology investments and keep our sales activity at the highest level.

Sten Karlsson, CEO