After adjustments for revenue deferrals and the impact of cash flow hedging and sales incentives, net revenue was DKK 1.1 billion. This is an increase of 12 percent compared with 2020. Operating income amounted to DKK 93 million, a decrease of 17 percent. Milestone considers this satisfactory considering the business impact of the ongoing pandemic in all regions, the investment in strategic initiatives, and the implementation of a new organizational structure.

Looking at results in our markets, 2021 has been a year where some markets have been recovering from the COVID-19 pandemic, while others are still severely affected. 

We have seen new structural challenges such as component shortages combined with markets partly closing once again at the end of the year. However, the demand for our solutions continues to be strong despite the challenging market conditions. During the year, we launched our new Milestone Husky Ivo series, an offering optimized with a range of products to cover a wide range of solution needs.

In addition, we worked together with our partner Briefcam within the Canon Group to create XProtect Rapid REVIEW, an intelligent video analytics solution that enables customers to quickly review and analyze forensic video content. This new product has helped us grow our business and increase the value that our solution brings to our partners and customers.

Invoiced revenue in the Americas region amounted to DKK 548 million, corresponding to a decrease of 5 percent compared with 2020. 

The North American market continues to grow despite the difficult business climate and Milestone had a strong close of 2021 with record sales in December. During the year, we have signed several key projects within the global technology, transport, and healthcare industries. The strong sales have been offset by the USD/DKK exchange rate which causes the decrease in invoiced revenue. 

Milestone sees great opportunities in the North American market and as a part of the adjusted strategy, during the second half of 2021, Milestone increased its presence in the American region, and this will continue into 2022. The markets in the Caribbean and Latin America regions continued to be impacted by COVID-19 restrictions and an unstable economy. This has led to a decrease in sales compared with 2020. 

The Asia and Pacific region (APAC) was severely impacted by COVID-19 in 2020 with shutdowns throughout the region. 

In 2021, the business climate improved significantly, and as a result, Milestone has had a strong year in the region. Invoiced revenue amounted to DKK 158 million in 2021, representing an increase of 54 percent compared to the same period last year. All sub-regions have recovered well, with India, South Pacific and Taiwan growing most and delivering several key projects within the security, aviation and retail industries.

The Europe Middle East and Africa (EMEA) region had a strong year with invoiced revenue amounting to DKK 538 million, representing an increase of 24 percent. The business climate in the EMEA region has been satisfactory despite restrictions being lifted and reintroduced in different areas of the region. Markets in South and North Europe showed strong growth and key projects within government, security and healthcare were signed.

Operating expenses totaled DKK 995 million compared with DKK 856 million in 2020, representing an increase of 16 percent. The increase is mainly driven by higher costs for personnel and is a consequence of Milestone launching an adjusted strategy and a new organizational structure to support the strategy during the year. With the strategic adjustment, Milestone is increasing its focus on marketing activities, investing in increasing presence in the North American market and continuing to drive an innovation agenda. This was partly offset by travel, consultancy, meeting activities, and other staff-related costs that have been affected by the pandemic.
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Operating expenses amounted to 87 percent of revenue compared with 84 percent of revenue in 2020. 

Research and development expenses amounted to DKK 297 million compared with DKK 264 million in 2020. This corresponds to a growth of 13 percent as a result of investments in the number of full-time employees and increasing costs for consultants. Total research and development expenses corresponded to 26 percent of net revenue in 2021, the same level as 2020, and this was a testament to the ambition of continuous investment in software development to make our competitive position stronger.

Distribution and sales costs amounted to DKK 596 million, compared to DKK 507 million in 2020, which represents an increase of 18 percent. 
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Milestone has continued to add new members to our regional sales teams.
The main investment has been in the North American region as a part of the adjusted strategy. Costs related to travel, meeting and marketing activities increased compared to 2020, but these costs have been affected by the pandemic and have been lower than expected going into the year. Total distribution and sales costs corresponded to 52 percent of net revenue, an increase from 50 percent in 2020.

Administrative expenses amounted to DKK 101 million compared with DKK 86 million in 2020, which corresponds to an increase of 18 percent. The increased investment is due to the strengthening our support organization by adding a new Business Performance Management area and strengthening the Strategic Office to support and drive business decisions. In addition, Milestone has maintained its focus on People First and has initiated a project to create “The workplace of the future.” Total administrative expenses correspond to 9 percent of net revenue, an increase from 8 percent in 2020. 

An operating income (EBIT) of DKK 93 million was recorded for the year, compared with DKK 112 million in 2020. The decrease of 17 percent was a consequence of increased costs related to the new organization plus initiatives to support the adjusted strategy, investment in new headcounts to fuel future growth and increased costs for travel, meeting and marketing partly as a consequence of the normalization of the pandemic. This is also the reason why we didn’t meet our expectation from the Annual Report 2020 at which time an EBIT on the same level was expected.

Profit before corporate tax was DKK 122 million in 2021, compared to DKK 67 million in 2020, corresponding to an increase of 83 percent. 

The increase in profit before corporate tax was predominantly a consequence of the increase in U.S. dollar to Danish krone exchange rate.Milestone delivered a satisfactory financial result with profits slightly below expectations despite the uncertainties as a result of the COVID-19 pandemic and increased costs relating to the adjusted strategy. 

The total value on the balance sheet as of December 31, 2021, was DKK 1,636 million, compared with DKK 1,546 million on December 31, 2020. The total equity amounted to DKK 788 million at the end of 2021, compared with DKK 750 million at the end of 2020. Cash at bank and in hand as of December 31, 2021, was DKK 155 million, compared with DKK 313 million on December 31, 2020. The decrease in cash at bank and in hand is mainly due to an increase in loans given to Canon Inc. of DKK 153 million. Milestone’s financial position is considered strong and healthy.