Financial review


Milestone delivered 10 percent revenue growth and revenue exceeded DKK 1 billion.
In 2019, the Milestone Group’s invoiced revenue grew to DKK 1,166 million, corresponding to an increase of 13 percent. After adjustments for revenue deferrals, impact from cash flow hedging and sales incentives, net revenue was DKK 1,026 million. This is an increase of DKK 92 million or 10 percent compared with 2018. The positive revenue development was mainly derived from an increase in license and Care™ sales. Demand for VMS solutions continues to grow in all regions.
Results in our markets
We continued to increase sales and have signed several large projects in all regions during 2019. Invoiced revenue in the Americas region amounted to DKK 523 million, corresponding to an increase of 15 percent.
The North American market continues to show strong growth with Canada, Northern US and Southern US exhibiting favorable growth with key projects within education and technology industries.
This is partly offset by negative growth in the Caribbean region and Latin America caused by the current economic and political situation.
The APAC region grew by 16 percent and invoiced revenue amounted to DKK 156 million. India delivered strong growth signing several key strategic projects within industries such as technology, police and financial services during the year.
Japan, South Asia and North Asia developed satisfactorily and grew in line with expectations. The South Pacific markets did not develop as expected, with decreased sales in New Zealand.
In the EMEA region, invoiced revenue amounted to DKK 487 million representing a growth of 10 percent.
The emerging markets, Southern Europe and Middle Europe, showed good performance and several large project deals were closed in the Middle East, France and Turkey within transportation.
Northern Europe decreased slightly mainly due to the United Kingdom not meeting expectations because sales were affected by the economic and political situation caused by Brexit.
DKK 156 million invoiced revenue
DKK 487 million invoiced revenue
DKK 523 million invoiced revenue
Products and service
Invoiced revenue generated from Milestone licenses and certification amounted to DKK 658 million, equivalent to 56 percent of total revenue, and an increase of 12 percent compared with 2018. The main product in the Advanced segment is XProtect® Corporate representing 40 percent of license revenue. In the Business-Ready segment, the main product is XProtect Professional+, that represents 24 percent of license revenue. Both products continue to show good performance and are growing year on year.
Invoiced revenue generated from Care™ amounted to DKK 384 million, equivalent to 33 percent of total revenue and a strong increase of 22 percent compared with 2018.
Operating expenses
Operating expenses totaled DKK 844 million compared with DKK 693 million in 2018 representing an increase of 22 percent. The growth is mainly driven by higher costs for personnel and is a consequence of Milestone’s increased focus on driving innovation and the continued expansion of our sales force. Operating expenses amounted to 82 percent of revenue compared with 74 percent of revenue in 2018.
Research and development
Research and development expenses amounted to DKK 237 million compared with DKK 190 million in 2018, corresponding to a growth of 25 percent following the investments in Accelerate Innovation, investments in Innovation Lab, increased focus on using staff on demand and increasing depreciation from capitalization of development cost. Total research and development expenses correspond to 23 percent of net revenue in 2019, an increase from 20 percent in 2018.
Distribution and sales cost
At the start of 2019 we held our 14th Milestone Integration Platform Symposium (MIPS) in Copenhagen with the largest audience ever. Over 800 attendees came from 50 countries around the world. The continuing success of MIPS over many years is important because it shows that we take care of our community, and it sees Milestone as a great company to partner with.
Administrative expenses
Administrative expenses amounted to DKK 84 million compared with DKK 64 million in 2018. The increased investment is driven by  consultants assisting on various projects, and an increased investment in communication and recruitment to shape our company culture and strengthen our employer brand. Total administrative expenses corresponded to 8 percent of net revenue, an increase from 7 percent in 2018.
Income and balance sheet
An operating income (EBIT) of DKK 124 million was recorded for the year, compared with DKK 194 million in 2018. The decrease of 36 percent was a consequence of establishing Arcules Inc. and the subsequent sale of the related activities in 2018, the increase of our development capacity and investments in new headcount to acceleratefurther growth.
Profit before corporate tax was DKK 130 million in 2019, compared with DKK 209 million in 2018, corresponding to a decrease of 38 percent. Milestone delivered a satisfactory financial result in which profit was in line with expectations and the planned decrease was due to the significant investments in growth initiatives.
The total value on our balance sheet as of December 31, 2019, was DKK 1,479 million, compared with DKK 1,201 million at December 31, 2018. The total equity amounted to DKK 725 million at the end of 2019, compared with DKK 630 million at the end of 2018. Cash at bank and in hand as of December 31, 2019, was DKK 347 million, compared with DKK 249 million on December 31, 2018. As a result, Milestone’s financial position is considered strong and healthy.
Cash at bank and in hand as of December 31, 2019, was DKK 347 million, compared with DKK 249 million on December 31, 2018. As a result, Milestone’s financial position is considered strong and healthy.
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