Addnode Group AB (publ)

STO:ANOD B

Earnings Call Transcript 2020-Q2

[Johan Andersson, President & CEO]

Thank you, and welcome to the presentation of our Q2 Report for Addnode Group. With me, I also have our CFO, Lotta Jarleryd, who will be doing part of the presentation. I know it's a busy day for most of you and a lot of companies reporting, so let's get to it.If we start the presentation and move to the next slide. You can go straight to the slide called Strategy for Profitable Growth. I just want to give you a quick update on the annual strategy, where we are. We are basically doing the same thing that we have been doing the last 10 years. We have an acquisition-driven growth strategy, meaning that we do normally 5 acquisitions a year, and we support our companies with organic growth. We believe in a decentralized strategy, a lot of decision power close to our customers. We support our companies, and we find synergies and collaboration where possible. This strategy has taken us from a net sales of SEK 1 billion in 2009 going to almost SEK 4 billion in net sales before COVID-19 here in 2019, and we have been able to improve our margins as well.And if we move to the next slide, describing our 3 divisions, called Software and Digital Solutions in 3 Divisions. We are doing our operations in 3 divisions: Design and Product Lifecycle Management and Process. The design is, basically, we serve the needs of those who need to design, build and manage, and we do that both for the construction and facility management and also for the manufacturing side. And we do that in 3 different companies. And here we are a partner to Autodesk, and we also have our own developed software in the company, Symetri and Tribia, SaaS offerings. And if we move to the PLM division, here we are the world-leading partner to the French company Dassault, providing software and services with the need for digitalization, and we are doing that on a more global basis. If we go to the third division, process, this is directed to the public sector in Sweden predominantly, providing software and services for the need of local and central government.With that as an introduction to Addnode Group, we'll move to the next slide because this next is saying, describing where we are at. And most of you who are following us knows that we are predominantly operating in the northern part of Europe. We have been growing in the U.K. predominantly the last year, and -- but we serve customers on a global basis.So with that introduction, I would like to move to the next slide with the agenda for today. Lotta and I will be covering a summary of Q2, talk a few seconds about the acquisitions we have done in the quarter and then move on to our group performance, and then we'll finish up with the financial position.So going into Q2 2020 on next slide, Slide 7. The second quarter was dominated by the COVID-19 pandemic, but our 3 divisions were impacted to various degrees. We have a situation where the majority of our employees are working from home. And with the help of video meetings and other digital tools, we are continuing to work closely with our customers. I'm impressed and proud of our employees' loyalty and capacity to keep the business going. What we see is that demand for the public sector in Sweden remains stable. And in the Process Management division, we have been awarded contracts from state agencies, regions and municipalities. And later when we go to the figures, we will see that we have increased the profitability a lot. On the other hand, the COVID-19 pandemic has negatively impacted sales in the Design Management, PLM divisions. We have actively reduced operating costs during the quarter through furloughs, voluntary sale cuts, general cost-cutting, and we have delivered a strong result given the difficult market conditions.But to realize synergies and adapt the organization in division PLM, we have launched a cost-cutting program there that will save cost for approximately SEK 50 million to SEK 60 million on a running basis. I will come back later to that in the presentation. We've also done an acquisition in the quarter of a SaaS company called Netpublicator, who will strengthen our offerings into the public sector in Sweden. Looking ahead already, we can see that the future, as you all know, is hard to predict, but we can also see the strength in our business model with a large share of recurring revenue are stabilizing the business and our financials.So with that as a sort of overall introduction to the quarter, I would like to hand over -- oh sorry, before that, the acquisition on the next slide, Q2 2020. We acquired a company this quarter called Netpublicator. It's a pure SaaS company providing digital document and meeting management to public administration. We have been working closely with them the last couple of years, and they are already a part of our offering. The company net sales is about SEK 16 million, good profitability. The arrangement with the owners is that we acquire 50% of the company now, and then we will acquire the rest in installments in the next coming 3 years. And it will be part of the Process Management division from 1st of July.So with that, I would like to hand over to our CFO, Lotta Jarleryd, who will take you through the numbers for the Q2 on the next slide.

[Lotta Jarleryd, Chief Financial Officer]

Thank you, Johan.Page 9, please. I would like to start with an overview of the consolidated financial performance. In the second quarter, which was dominated by the COVID-19 pandemic and its effects, we saw a decrease in revenue of 2%, SEK 846 million compared to SEK 864 million quarter-over-quarter. Acquired growth of 11% mainly pertain to Excitech in the U.K., which was acquired earlier this year. The currency-adjusted organic growth was minus 12%. Both Design Management and PLM divisions faced negative growth following lower new sales of third-party licenses and services caused by the challenging market conditions. Process division, however, recorded an organic growth of 3%. The demand for the division solutions remained good during the quarter. We are now trading at a yearly rate of SEK 3.8 billion in net revenue.EBITA for the second quarter was SEK 56 million, which was 24% less than previous year. The EBITA margin was pushed down to 6.6%. Please note that the reported EBITA includes costs associated with the adoption of the organization and cost structure in the Product Lifecycle Management division. Costs for conducting the measures are estimated to SEK 35 million in total, of which SEK 20 million were recognized in the second quarter. Annual savings are estimated to about SEK 50 million to SEK 60 million, with full effect from the first quarter 2021. EBITA adjusted for these restructuring costs was SEK 76 million and adjusted EBITA margin of 9.0%. During the second quarter, personnel costs were reduced by SEK 29 million through government support measures in several of the countries where we operate. The government tax initiatives relate mainly to short-term furloughs and reduced social security costs.Next page, please. With regard to the net revenue distribution, recurring revenue constituted 66% of total revenue in the second quarter 2020. The base of recurring revenue has continued to grow over the years. As Johan previously mentioned, the stable base of recurring revenue gives downside protection in times of lower demand. Even though we saw total net revenue go down by 2%, recurring revenue increased in the second quarter by 3% to about SEK 550 million. We have so far been able to keep the renewable rate on a stable level.Over to you, Johan, again.

[Johan Andersson, President & CEO]

Thank you, Lotta.And with that, I would like to dive in a little bit more through the different divisions, starting off with division, Design Management, on Slide 11. Looking at Design Management, sales increased with 13% in Q2. Organic growth was still negative, meaning that we had an impact of the acquisition of Excitech in -- that we did in the first quarter. The asset for currency effect organic growth was minus 13%. We could see a clear downfall in the net sales due to the COVID pandemic in this division, which was mainly reflected in lower new sales of Autodesk solutions. However, recurring revenue show continued stability with a renewal rate at the same level as before downslope of the pandemic. The division's offering based on property software surrounding BIM and collaboration portals for the construction and infrastructure sector as well as property management showed continued favorable development. The EBITA was SEK 36 million compared to SEK 35 million last year, gave an EBITA margin of 9.5% compared to 10.4%. Personnel costs were reduced through short-term furloughs, lower social security taxes and voluntary salary cuts and had a good impact on the operating profit.Even though new sales was slow, we added some new customers, for example, a facility management system to Region Gävleborg in Sweden, a design system and competence-sharing systems to Transport for London, for example. We also passed a milestone for our Interaxo SaaS project portal for construction and infrastructure projects when we exceeded 50,000 users during the second quarter. So overall, the net sales down as expected as we sort of guided in the last quarter, but we have been very successful through hard work of the team and the division to mitigate that on the cost side.Moving on to the PLM division on the next slide. Net sales decreased to SEK 267 million during the second quarter. We had a negative growth of 20%, meaning that here, we were more effective on net sales than design. EBITA was negative SEK 9 million, but as Lotta mentioned before, in those SEK 9 million, you will find SEK 20 million related to restructuring costs. Before we go into more in detail why we are doing the restructuring, I would like to mention that the market in the Nordic was -- the organization in Nordic was quite stable, and we were doing some good business with relation to where we are in the market with the pandemic, but it was tougher market conditions in Germany and U.K. We have been able to land some new deals as well on the 3DEXPERIENCE platform in Germany, for example, to a company called [ Trysler ], providing tools for spinning and the cotton industry. So there are possibility to do business even though it's tough.With regards to the restructuring, to give you some background on that. Between the years 2000 and 2019, this division has grown by an average of 37%, 3-7, has been achieved both organic and from acquisitions. This has taken us to the position as a world-leading partner to Dassault Systèmes with our own unique add-on products and services. To realize synergies and adapt organization and operating costs or lower volume, several measures have been taken during the quarter that will reduce the cost on a yearly basis with around SEK 50 million to SEK 60 million from the first -- with full effect from the first quarter in 2021, but we will gradually see that during this year. Doing that means that we will take costs in this quarter, SEK 20 million, to realize it, and SEK 15 million is expected in the third quarter, totaling to SEK 35 million.So with that, I would like to move on to the next division. The division, Process Management, on the next slide. Really happy to see that we have an organic growth here. We, as you all know, who've been following us, we are saying that we are able to do is 2% to 3% organic growth in this division. It's a good statement, and we have been able to do that. What is most satisfying is that we've been able to increase the productivity in the organization significantly, moving the operating EBITA margin from 11% to 18% compared to last year. Here, we also have some impact from the reduction of personnel costs due to state efforts, but the majority of the efficiency improvement in the quarter is related to our own doing. The demand for the division solutions has been good during the quarter, and we have won several tenders. For example, for a new case management system for the Swedish National Board of Housing, Building and Planning. We have also won several tenders for the more local government in Sweden with regards to case management system. And part of that has been with the Netpublicator offering that we described earlier as an acquisition. So here, we have a good operation in Q2, and it seems that we will be able to follow that through during the year.So with that, I would like to hand over to our CFO again who will guide you through the cash flow in the quarter.

[Lotta Jarleryd, Chief Financial Officer]

Thank you, Johan. We usually start the year with a strong first quarter in terms of cash generation from operating activities. This is attributable to our business model with a large share of advanced payments for maintenance contract in the beginning of the year. This year, we continued the good cash generation, also in the second quarter. Cash flow from operating activities was SEK 188 million, more than SEK 200 million above previous year. Intensified work with cash collection procedures and temporarily improved payment terms from certain suppliers and customers have had a positive effect on cash flow in the quarter. With regard to cash flow from financing activities, it was also positive. No dividend for 2019 was paid to the shareholders, as decided by the AGM in May, and we made no debt repayments during the quarter.Next slide, please. We are operating in this uncertain environment, supported by a strong balance sheet. We have a solid financial position. As Johan mentioned, we had a very strong operating cash flow during the first 6 months of 2020. This means that we, by the end of June 2020, had a cash position of SEK 675 million. This is almost SEK 0.5 billion more than in June previous year. In addition to that, we have unutilized credit facilities of another SEK 400 million. The equity ratio was 40%, and net debt amounted to SEK 117 million. Other larger changes in the balance sheet items mainly refer to the acquisitions of Excitech and then Unizite in January this year.Over to you, Johan.

[Johan Andersson, President & CEO]

Thank you, Lotta. And with that introduction to the second quarter, we would like to open up for Q&A and questions, and we are happily to answer any questions from you.

[Operator]

[Operator Instructions] Our first question comes from the line of Daniel Thorsson from ABG.

[Daniel Thorsson, Research Analyst]

Yes, perfect. I start off with 2 questions regarding the cost program in PLM. What practically is it targeting? And where is it tilted geographically? That's the first one. And then second one, following on that, in terms of the potential EBITA margin beyond 2021, is it possible to reach a margin that is higher than we have seen historically for the business unit?

[Johan Andersson, President & CEO]

Thank you. With regards to the cost restructuring program, I understand exactly where it's targeting. Our main cost is personnel. That means that the majority of the construction program is with regards to reducing the number of staff. That's what will happen during this year. And there will be some -- and with that, there will follow some cost for offices that will, of course, will be reduced, but that will be an effect of being less people delivering the services to our customers. And if you look at geographically, we have, in the last quarterly reports, talked about that there are some things happening in Germany. So you will -- there are in Germany and the rest of the program is sort of evenly spread through the division, but there's a majority of the program that will happen in Germany. And if we talk about margin-wise, we still believe that we can do better that we are doing, and that's one of the reasons why we're doing this cost restructuring program. So there are room for efficiency.

[Daniel Thorsson, Research Analyst]

Okay. Even if we compare to a good year as we saw in 2019, I think you had the highest margin of slightly above 9%. So it should have a potential to be better than that going forward?

[Johan Andersson, President & CEO]

We are aiming for that. And -- but it also has to do with regards -- as we have an acquisition agreement strategy. Sometimes, we acquire a company that have a lower margin, and then we aim to drive that up. So sort of them, fundamentally, yes, we should be able to do better. But sometimes, we hurt ourselves, on a matter speaking, by acquiring companies that has a lower operating margin, and then we try to drive that up. So fundamentally, yes, I'm not satisfied with if we are not doing better.

[Daniel Thorsson, Research Analyst]

Excellent. And then another 1 on the governmental support of SEK 29 million in the quarter. Could you split that up per business unit, if possible? And also, what's your forecast for support in Q3?

[Johan Andersson, President & CEO]

We can't split it up. We're not disclosing exactly where it is. But the only thing we can get is saying that, as we said, we have the net sales going down in division design and PLM. So you will find a majority there sort of follows the business, but we're not disclosing exactly. And with regards to where we are going forward, I think the projections you will see a lot of -- we're not saying too much, we're saying that we will see effect of it in Q3 as well, but then we'll fade out going forward.

[Daniel Thorsson, Research Analyst]

Okay. But is it reasonable to expect anything close to SEK 29 million in Q3 as well?

[Johan Andersson, President & CEO]

It will go down, but it will have an effect in the Q3.

[Daniel Thorsson, Research Analyst]

Okay. That's good. And then I have a question on the recurring revenue. You said that they grew -- reported 3% year-over-year in Q2. What was the development organically? I guess it was a decline, if you have that figure.

[Johan Andersson, President & CEO]

Would you say the 3% was that with the -- as we have reported?

[Daniel Thorsson, Research Analyst]

Yes, reported recurring revenue growth year-over-year, 3% reported, so I was thinking of the organic development. It was probably down, but...

[Johan Andersson, President & CEO]

You're true in your assumption, yes, because we will see -- it's definitely not an organic growth in it. Now that's true this quarter.

[Daniel Thorsson, Research Analyst]

Okay. Okay. We'll leave it there. And then a final one, Autodesk, they held an Investor Day in June, launching new financial targets where they reported a targeted 16% to 18% sales CAGR between 2020 and 2023. And given that you partly resell their products within Design Management, is it too aggressive to expect a similar organic growth rate for that division and that business unit for the next 3 to 5 years? Anything else that moves that picture from what Autodesk is saying?

[Johan Andersson, President & CEO]

You mentioned that they said that organic growth in the next coming year should be like 23% or what was there?

[Daniel Thorsson, Research Analyst]

16% to 18% per year up until 2023, that's the target.

[Johan Andersson, President & CEO]

We will not deliver 16% to 18% organic growth the next coming years in that business.

[Daniel Thorsson, Research Analyst]

And is it anything that makes you deliver something lower than Autodesk because you're still selling their products? Is it because you have more own products, you have other services around it, et cetera, that are developing a bit slower? Or how should we think about it?

[Johan Andersson, President & CEO]

We have more services in our businesses, and we are probably in a more mature part of the world representing for them. They are -- Autodesk are on worldwide operation, probably means that they have part of the business in the world that probably has a higher growth rate as well. So I think probably a mix of that, if I'm sort of guessing. But we are not planning for that high organic growth in this business.

[Operator]

Our next question comes from the line of Jon Hyltner from Enter Fonder.

[Jon Hyltner, Fund Manager of Equities]

So my first question is on the organic sales growth. Can you say a little bit more about it? Is it from less new licenses, but it's not as many new customers coming in? Or did you see lower revenues from your customers, perhaps laying off people, so less licenses due to less customers in that trend? Or you see a lot of existing customers leaving you? Or could you just explain a little bit more where the drop came from?

[Johan Andersson, President & CEO]

Thanks for that question. And it mainly relates to the businesses when we are talking about in design and the PLM business, we -- no, we don't -- just first answer your last question, we can't see that we are losing customers. What's happening now is that the customers are hesitant to do new investments due to the uncertainty, so the things take longer. They are waiting. They are not starting new projects by themselves, so the services are affected. And also, as you mentioned, the -- a lot of redundancies are customers. They are looking at cost, it means that they are not investing in new licenses. They are rather utilizing the license pool that they have in a better manner, but we can't see that we are losing customers to others in the market. That's very important. But the sort of the activities from our customers are lower, and that is hurting both new sales and licenses and services for new projects. The projects that are sort of are already in motion, they are continuing. So there's not a hard shutdown of that. But at the same time, if you have customers in automotive industries who are not running their plans right now, then that means that this quarter, they are not focusing on buying new licenses.

[Jon Hyltner, Fund Manager of Equities]

And given that trend in -- you mentioned Autodesk, seems to be still under pressure than the other industry here picking up. Can you just mention anything about the trend during the quarter, if you saw a pickup in June versus May, perhaps?

[Johan Andersson, President & CEO]

I think sort of the -- I can't really say that we have seen any pickup in the figures, so to speak, month-to-month. It's more of the mindset of people realizing that oh, it's probably -- it's not going to be as bad as we thought in Q2 and Q3. But at the same time, we can see the trend that it -- the sort of the -- in the market, we had a sort of belief that Q4 will be better as -- better than a major sort of pickup there. It may take longer time, but the sort of the drop will not be that bad. Do you see where I'm coming in?

[Jon Hyltner, Fund Manager of Equities]

Yes. Sort of. Then coming to your cash flow, you had a pretty big working capital release in the quarter. Can you explain that a little bit more, please?

[Lotta Jarleryd, Chief Financial Officer]

Yes. No. As I said before, I mean, we have been -- we have focused a lot on C2 that we get our invoices paid as soon as possible, of course. And I mean we have a very high new sales in the first quarter, where a lot of payments came in the second quarter. And we also got from some of our suppliers. We got prolonged payment terms. That don't go on forever, so we probably see a turn back on that in September. Also, some of the customers, especially in the public sector, they actually paid us before the inquiries were due. So we have been very active in working on our cash flow in the second quarter.

[Jon Hyltner, Fund Manager of Equities]

And then just finally, we look at your margin in Process Management, it increased a lot, giving a rather stable top line trend. It is mainly due to a lot of costs being lower in this quarter due to less travel and what have you? Or did you get furlough in this segment so you reduce cost investments?

[Johan Andersson, President & CEO]

You have a component of that, but most of that is a better efficient in organization, meaning that we are able to deliver more with our own people, reducing sub-consultants and better project management, and I think that's the main driver of the operating profit in the division this quarter compared to last year. And of course, we have some effect of sub-consultants as well, but that's sort of minor compared to our own operational efficiency, and operational efficiency is the factor that we are able to manage projects better with our own people rather than sub-consultants.

[Jon Hyltner, Fund Manager of Equities]

And this is a setup that you will keep going forward, so you should have the acquisition going forward as well?

[Johan Andersson, President & CEO]

Yes, that's our ambition.

[Jon Hyltner, Fund Manager of Equities]

Then a final one on the cost savings. You mentioned you talked about signages. The savings that you take out, is it over that, that you've seen for a while and been planning for that you now execute on?

[Johan Andersson, President & CEO]

Yes. It has to do with that. For the last couple of years, we have been acquiring the #1 supporter in Germany, U.K., Benelux and several countries. And now we are coming together to create One Technia. That's the branded division, and that means that we have synergies, both on the administration, the cost side, sales organization and creating one company of that. Probably, it takes a little bit longer in our setting, but now it's mature to do that, and then we're really licensed. So it's in several areas. So it means that overlaps, yes, that you sort of need less sort of actually. So yes, it's overlap, but it's in several areas.

[Operator]

Our next question comes from the line of Erik Elander from SHB.

[Erik Elander, Research Analyst]

All right. So first of all, regarding the cost restructuring program that you have now initiated, why is it done right now? And why wasn't it done before. As we mentioned, it is major consulting business, meaning that if you lose top line, you also lose profits, so you don't have a lot of synergy. Is it that these kind of people didn't really do the projects that you think will be demand for post-COVID? Or why hasn't this happened earlier?

[Johan Andersson, President & CEO]

Starting with that, as we described, I think we described it quite clearly in the Q4 and Q1 report saying that we were aiming for higher growth as we started this year. So that's one of the reasons why we could -- the growth that we were hoping for were not materializing the market. And then we had made a bet early on saying that we will see growth in the company, so we were sort of front-loading the organization. That's one of the reasons we need to do that. But having said that, I think the majority is that sometimes, you have to find the right time to realize the synergies from having to grow, meaning that -- so you never know when it's the right time. And then you had the one question that say, are there sort of not just a cost restructuring program rather that we can see that we will focus more on different type of offering within the division going forward, and that's part of it as well. We can see that we are moving from some sort of old box moving, selling organization to more of a service and project organization. So it's part of that as well, so a bit of all of the above. And you can always discuss the timing, but we felt that it was the right time to do it.

[Erik Elander, Research Analyst]

Okay. So it's actually -- I mean getting these people laid off from the organization doesn't really matter because you do not think that this offering that you have previously had, that these people were doing will not be as large in demand as it has been historically?

[Johan Andersson, President & CEO]

No. I think that's not fair to put it. No, no. I think there are some part of that, but that's not the reason for whether -- so we are not leaving our old offering. So the restructuring product doesn't represent that we're leaving an old offering, it's more of a say that we were actually, as we mentioned in the Q4 and Q1 report, we had a -- we were sort of front-loading the organization for growth in 2020, and we couldn't imagine that we would see the COVID pandemic. That's one of the reasons. And then we also had -- as we have been growing by like 37% every year in the last 5 years. And we have done that through acquisitions, we can see that now it was time to realize the synergies that we can go from going from a Nordic organization to a German organization to U.K. organization to U.S. and the global organization, and there are synergies that we need to get. So I wouldn't say that we are sort of leaving a part of the offering behind us, it doesn't represent this cost restructuring program. It's more realized the synergies that we can see within the organization going forward, that we are able to run a more efficient organization going forward.

[Erik Elander, Research Analyst]

Okay. Yes, that's very clear. My second question is with regards -- or actually, if you compare Design Management and PLM, I mean at least my view of the design management division is that its less cyclical than the PLM. And obviously, if we look at our organic growth numbers, it was minus 13% in design and minus 20% in PLM. But having that said, it was still a large minus number in design. And I know that you have an industry exposure there as well. Is it fair to say that the industry exposure within Design Management grew by minus 20% as well organically and the rest were positive growth there within the DM segment that you're also talking about in the Q2 report?

[Johan Andersson, President & CEO]

No. I wouldn't say that because you have to realize in the big segment as well, we have a lot of the consulting companies as customers. And the technical consultants, for example, they are the one providing the design and the BIM projects for the construction companies. So that means that they have been a little bit hesitant. For example, you will find customers like in Sweden, they are called [Foreign Language], they're called, [Foreign Language] example, and they've also been hesitant with regards to consultants. So there has been a drop there as well in that sector in this quarter.

[Erik Elander, Research Analyst]

Okay. Yes. So rather, this is about this company doesn't hire new people than they don't buy new software from you just because organic growth in those companies was around 1%, 2%, especially in [ Waco and railers ] and so on?

[Johan Andersson, President & CEO]

But they are to say that everybody in this quarter, everybody is a little bit -- very hesitant to do new investments. You utilize the things that you have even better. You get focus on costs and you don't order new things. Hopefully, they might start doing this after the summer, but just this quarter, it's heavily affected. But I think every Board has been telling every management in every company, do mind the costs because we don't know what will happen in the coming months. So I think that's the effect that we see in our new sales of licenses and services.

[Erik Elander, Research Analyst]

All right. Perfect. And then also just a follow-up on that one, how large a percentage is industry exposure within Design Management?

[Johan Andersson, President & CEO]

Hopefully, I could give you that figure, but I really can't do that because it depends on how we sort of split it because we have a lot of what we probably would call AEC customers, but they are, at the same time, a manufacturing company providing their products to the end market of the AEC market. So we can't really give any figures of that. But having said that, as you remember, there are 3 brands within the division. The division of Tribia -- the company, Tribia and service was global, with our own software. They are working with the construction and the facility management. The brand of SYmetri, who are providing Autodesk solutions, they are the one working with both the manufacturing and the AEC market. And we are predominantly in that division more tilted to the AEC market as we did the acquisition of Excitech as they have much stronger sort of tilting towards the AEC market. So if any, we have more of an exposure to the AEC market rather than the manufacturing market.

[Erik Elander, Research Analyst]

Okay. Great. And then my last question is, you have now taken out SEK 20 million in restructuring costs in Q2 for PLM. Will the next SEK 15 million come in Q3 or later? Or when will it come?

[Johan Andersson, President & CEO]

Q3, that's our -- what we are planning for.

[Operator]

Our next question is a follow-up question from the line of Daniel Thorsson from ABG.

[Daniel Thorsson, Research Analyst]

Yes. So I have a question on the M&A contribution in Q2. If I'm right on numbers here, it looks like Excitech contributed with SEK 290 million in Q1, although it didn't contribute in the full quarter. But now in Q2, it only contributed with SEK 90 million. Is that correct? Is it a seasonal pattern? Or is it just a very weak development for Excitech in this quarter?

[Johan Andersson, President & CEO]

I think, first of all, they contributed fully from January 1 in Q1. So the figure that you -- independent of the figure, it was fully consolidated from January 1. And having said that, Q1 was the strongest quarter in sales ever for Excitech and SymetrI, so it was a very, very strong quarter in Q1. And then we moved to Q2, that was probably the one of the worst quarter. So we have a very significant change there, you're correct in that. But having said so, you -- and there's a seasonal pattern as well that Q1 is always stronger, has been historically, and Q2 is weaker. So it's a little bit of all of the above.

[Daniel Thorsson, Research Analyst]

Okay. That's very helpful.

[Johan Andersson, President & CEO]

So the comps are strong, and the outcome is lower in Q2.

[Daniel Thorsson, Research Analyst]

How does it look for the rest of the year? Q3, Q4, anything we should have in mind from last year?

[Johan Andersson, President & CEO]

Normally, what sort of the seasonal pattern, if you look in -- before the COVID-19, is that Q1 for this part of the business is always stronger. And Q2 is a little bit weaker due to -- because there's a lot of sales activities rather than sales being done. And then you can see sort of Q3 and Q -- they're sort of a normal; in Q4, a little bit stronger. So -- and this is a sales-driven organization, and you can find that the Autodesk quarter ends in January -- the year ends in January, that means that Q1 for them ends in April and Q2 in July, et cetera. And with American sales-driven organization, where the last month in the quarter is generally generates some push in the sales there, so that's an explanation of that.

[Operator]

We have another follow-up question from the line of Jon Hyltner from Enter Fonder.

[Johan Andersson, President & CEO]

Sorry. If you mentioned this and I missed it, I'm sorry. But did you say anything about how much of the support you got from the government in terms of furlough or something else in the quarter?

[Lotta Jarleryd, Chief Financial Officer]

Yes. Sales at SEK 29 million in total.

[Johan Andersson, President & CEO]

Okay, great. And how does that look going into the second half of this year? Have you ended programs? I know some are ending in June at other companies. What's your plans?

[Lotta Jarleryd, Chief Financial Officer]

Some programs will continue into Q3 in the second quarter [indiscernible] and in the second quarter.

[Jon Hyltner, Fund Manager of Equities]

So there will be roughly the same effect in the third quarter as in the second?

[Lotta Jarleryd, Chief Financial Officer]

No. Lower, lower effect.

[Jon Hyltner, Fund Manager of Equities]

Yes. Lower effect?

[Lotta Jarleryd, Chief Financial Officer]

Yes.

[Operator]

And as we have no more questions registered, I now hand back to our speakers for any closing comments.

[Lotta Jarleryd, Chief Financial Officer]

Yes. We have a question sent in by e-mail here from [ Credit News at Red Eye ]. The EBITA margin in Design Management decreased by only 1 percentage point despite minus 13 in organic growth and Excitech with lower margins showing in the numbers. Is it mainly due to support measures? Or is there also a mix effect or something else?

[Johan Andersson, President & CEO]

No. I think the main reason why we're able to sort of uphold the result with -- even though the net sales drops in is that we were quick with actions, meaning that where there are a lot of people in furlough, there are a lot of people voluntarily doing -- giving up some salaries and those type cost-cutting measure, that's sort of the effect that we can see in the business where we are sort of able to uphold the EBITA margin. So I think it's a lot of quick action and a response from the different management teams in the divisions that we're able -- that made us being able to uphold the EBITA margin even though the net sales dropped.

[Lotta Jarleryd, Chief Financial Officer]

And the second question is best Q2 EBITA margin in Process Management since 2013. Could you give some quantification of the effect from the support measures?

[Johan Andersson, President & CEO]

I think we -- part of that we answered previously saying that the majority of the efficiency in the Q2 in Process Management is related to our own measures. We do have some -- a couple of millions of that is support measures, but the overall majority is actually that we are doing the business quite much better. And as I mentioned, with regard to less sub-consultants that driving the margin cost-efficient measures. Of course, there are some with regards to not traveling as much, but the majority is operating efficiency.Thank you. We have no further mailed questions. So if there are no more questions, I would like to thank you for taking the time to listen in and ask a lot of good questions to us. Any more questions? Or should we stop there?

[Operator]

There are no more questions registered over the audio.

[Johan Andersson, President & CEO]

Thank you.

[Lotta Jarleryd, Chief Financial Officer]

Thank you.