CLX Communications was founded in Stockholm, Sweden around the summer of 2008. The vision was to create an enterprise messaging company with state of the art technology at the heart of the business. Since then we have grown into a world leading Cloud Communications business, consistently outperforming the growth of our market and our competitors.
Words from our CEO – Johan Hedberg
CLX continues to grow - synergies contribute to increased profitability
The positive trend from the previous quarter continues. Revenues continue to increase, and in the final quarter of the year amounted to SEK 670 million, representing an increase of 13.5 percent compared to the previous quarter, while the gross margin remained high. It is worth noting that during the last two quarters of the year we had sales of approximately SEK 1.3 billion, which is almost SEK 200 million more than in the period's first four quarters together and, in addition, the gross margin was better.
Most gratifying, however, is seeing how well the integration and restructuring of the Mblox acquisition has worked, and how positively it is affecting profitability. Excluding integration and restructuring costs, EBITDA increased by 5.4 percent to SEK 76 million compared to the previous quarter.
The acquisition of Mblox has proven to be a very good deal for us and, in addition to significant synergies, has positioned CLX as the market leader in cloud-based messaging services. The acquisition is not only a key component of our strategy to expand into geographies and markets where the gross margin is high, but is strategically important in the long term as it positions us at the forefront of the market, which means we are becoming more relevant in larger and more comprehensive procurements than previously.
As planned, Mblox has strengthened our position in North America, and our growth in this market has been strong during the quarter. We are now a credible supplier in the North American market, which has quickly produced results and is opening up new business. France has also shown good growth during the quarter.
Our sector is changing rapidly, and CLX is not content to just evolve with the industry. On the contrary, we will lead the development, both by growing organically and through strategic acquisitions. In light of this objective, we acquired Sinch AB in December 2016. This is a strategically important acquisition that means we can now offer unique solutions for the integration of voice-based communication together with CLX’s existing cloud-based communication solutions for messaging. Our assessment is that Sinch will contribute positively to CLX’s EBITDA and earnings per share from 2018.
Work intensified in 2016 in the field of the Internet of Things. This continued during the final quarter of the year, and in 2017 we intend to gradually launch commercial applications for both new and existing customers.
The Enterprise Division continued its positive development and shows continued strong organic growth and significantly improved margins. The Operator Division, where we deliver strategic support systems to mobile operators, is also developing very well.
We have continued to focus on profitable growth through a balanced strategy of organic growth combined with participating in market consolidation. We have today announced the acquisition of Xura Secure Communications GmbH, a purchase that further reinforces our already-strong market position and, together with last year’s two acquisitions, helps to position CLX as a global leader in cloud-based communications.
Through this acquisition we bring further value to our customers by providing advanced security solutions together with CLX’s existing cloud-based communication solutions. Further information about the acquisition can be found in the communication made in connection with this exciting event.
We have proven to ourselves, to our shareholders and to our customers that we have the ability to grow and create value through making acquisitions and then successfully integrating the acquired companies.
The acquisition of Mblox and the subsequent integration have gone beyond our expectations, and as an organization we have both the expertise and resources to grow through acquisitions. The success with Mblox creates confidence and security, and we look forward to following the acquisitions of Sinch and, most recently, Xura. We already know that these will add considerable value to our core business and, in combination with our efforts in IoT, we are further advancing our position as the leading global partner in cloud-based communication services.
Stockholm, 17 February 2017
President and CEO
CLX Communications provides cloud communication technology, services and solutions to enterprises, society and mobile operators, supporting them to address and find solutions to all aspects of communication challenges today and for the future.
Cost leadership and Differentiation Strategy is at the core of CLX business principles and it defines us, who we are and how we operate.
Our Cost Leadership ambitions are to focus on achieving:
- Lowest customer acquisition cost by blending online, inside and field sales in an optimal manner.
- Lowest Cost of Goods Sold (COGs) by procuring directly from the source.
- Lowest number of customer care touches and lowest number of support tickets by focusing on the highest quality products.
- Lowest Cost of Ownership of our core platform by leveraging our Operator division technology capability and generating profit from R&D investments in our core platform.
Our aspiration to differentiate ourselves are focused in the following areas:
- Be the best in class Tier 1 Super Network with more Tier 1 connections to more places than anyone else.
- Provide our customers with world-leading technology (insert comma) excellent products, services and a personalized support with second-to-none quality ambitions.
- Maintain a healthy and challenging environment for our employees.
Our vision is to be the world's leading Cloud Communications and IOT company, addressing and fulfilling all aspects of communication needs, empowering and supporting global enterprises, organizations and mobile operators to achieve their objectives to the benefit of society, employees, customers and shareholders.
Connecting People and Things to a World of Infinite Possibilities.
Provide our customers with world-leading technology excellent products, services and a personalized support with second-to-none quality ambitions.
Maintain a healthy and challenging environment for our employees
The CLX financial targets are:
- Growth in adjusted EBITDA per share shall be 20 percent per year, starting with the calendar year 2016.
- CLX target is that net debt over time shall be below two times adjusted EBITDA (measured on rolling twelve months).
- Dividend policy - the Board continues to see good growth opportunities through acquisitions over the next few years, and therefore proposes that the company's earnings primarily are reinvested.
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