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2016-11-17

Seamless Distribution AB: INTERIM REPORT, THIRD QUARTER OF 2016

Third quarter (July - September 2016)

· Net sales was unchanged compared to the same period last year and
amounted to SEK 73.9 million (74.0)

· Operating loss for the period SEK -21.1 million (-27.8), an
improvement of 24 percent

· Loss after tax for the period SEK -21.0 million (-29.4)
· Earnings per share SEK -0.38 (-0.70)
· Cash flow before changes in working capital improved with SEK 3.4
million to -22.4 (-25.8), an improvement of 13 percent

January - September 2016

· Net sales improved with 2% compared to the same period last year
and amounted to SEK 206.1 million (201.1)

· Operating loss for the period SEK -62.4 million (-83.8), an
improvement of 26 percent

· Loss after tax for the period SEK -63.9 million (-85.7)
· Earnings per share SEK -1.28 (-2.04)
· Cash flow before changes in working capital improved with SEK 12.7
million to -58.3 (-71.0), an improvement of 18 percent

+-----------------+--------+--------+--------+--------+---------+
|Overview |Jul-Sept|Jul-Sept|Jan-Sept|Jan-Sept|Full-Year|
+-----------------+--------+--------+--------+--------+---------+
|SEK thousand | 2016| 2015| 2016| 2015| 2015|
+-----------------+--------+--------+--------+--------+---------+
|Net sales | 73 888| 74 034| 206 096| 201 123| 279 997|
+-----------------+--------+--------+--------+--------+---------+
|Operating result | -21 074| -27 775| -62 412| -83 848| -116 637|
+-----------------+--------+--------+--------+--------+---------+
|Financial net and| 38| -1 617| -1 500| -1 840| -2 671|
|taxes | | | | | |
+-----------------+--------+--------+--------+--------+---------+
|Loss for the | -21 036| -29 392| -63 912| -85 688| -119 308|
|period | | | | | |
+-----------------+--------+--------+--------+--------+---------+
|Balance sheet | 262 472| 205 421| 262 472| 205 421| 205 332|
|total | | | | | |
+-----------------+--------+--------+--------+--------+---------+
|Earnings per | -0.38| -0.70| -1.28| -2.72| -2.84|
|share, basic and | | | | | |
|diluted | | | | | |
+-----------------+--------+--------+--------+--------+---------+
|Operating margin | neg| neg| neg| neg| neg|
+-----------------+--------+--------+--------+--------+---------+
|Equity ratio | 59%| 51%| 59%| 51%| 50%|
+-----------------+--------+--------+--------+--------+---------+
|Capitalized | 6 173| 4 393| 19 246| 12 280| 18 244|
|development costs| | | | | |
+-----------------+--------+--------+--------+--------+---------+
|Depreciation | -5 107| -3 983| -13 231| -16 069| -20 780|
+-----------------+--------+--------+--------+--------+---------+

Significant events during the period July - September 2016

· All European Seqr users can now use Seqr to pay all over the
world. Contactless payment technology today allows for payments in
approximately 30 million point-of-sales globally.

· The board of directors' of Seamless has resolved on a directed
issue of convertible debentures of SEK 42 million to private and
institutional investors.

· Seamless has received its first order in the Americas. A
telecommunications operator has placed an order to purchase the
ERS360 transaction platform, which handles the electronic top-up of
prepaid accounts for mobile phones. In the first phase, the order
value will correspond to MSEK 5.

· Seamless acquires MeaWallet AS through an issue in kind of new
shares and simultaneously carries out a private placement. Through
the acquisition Seamless controls important technology in the rapidly
growing field of contactless payments. At the same time the company
has carried out a direct issue of new shares in a private placement
of approximately SEK 50 million to private and institutional
investors.

· Seqr is launching contactless payments in Sweden using NFC
technology (Near Field Communication). Contactless makes it possible
to pay with SEQR at point of sale (POS) terminals that support NFC
which is featured on almost all modern terminals, consequently it is
now possible to pay with SEQR in any store that supports the
functionality in Sweden or abroad, even if a retailer has no private
agreement with Seqr.

· Seqr payment solution launches its recently announced
international remittance service. Seqr users can now make
international money transfers - or "remittances" - to non-SEQR users.
Transfers from Sweden directly to India and Thailand will be the
first deployment of the service.

· Seqr launches in Austria, Ireland, Malta and Luxembourg. The
company's rapid expansion means that consumers can now use SEQR to
make payments in 16 countries.

Significant events after the close of the reporting period

· Seqr is launching a peer-to-peer money transfer solution that
enables users to instantly transfer money to each other regardless of
where they are in the world. The service is now being rolled out for
SEQR users in 14 countries.

· Seamless has obtained a Notice of Allowance (patent application
no. 14/347,742) from the United States Patent and Trademark Office
(USPTO) for its Seqr mobile payment solution. This implies that USPTO
intends to announce the approval of the patent within three months
following the payment of all fees.

· Seqr has been elected as the payment solution on the international
fair Web Summit, a fair which gathers 15 000 companies and 7 000
CEO's. The fair was held in Lisbon on November 7 - 10, and
approximately 50 000 participants will pay with Seqr.

· Seqr launches Contactless Payments and Gocardless Service in the
UK. Seqr customers in the UK are now able to quickly and easily link
their bank account to the Seqr app and make payments directly from
their bank account.

CEO's COMMENT

Dear Shareholders,

The third quarter of 2016 was a very active quarter for Seamless where
we laid stepping stones in the development to strengthen our position
as one of the world leaders in the mobile payment industry. Our
acquisition of the Norwegian company MeaWallet is a central part of
our strategy going forward. MeaWallet has developed the software and
infrastructure which Seqr uses for NFC (contactless payments). Seqr
launched this technology to its European users in September.

It is a large and important step that Seqr now works to pay with in
all NFC enabled card terminals in the world. The technology has
allowed Seqr to increase its acceptance network from approximately
twenty thousand POS (Point-of-Sale) to somewhere around 30 million
POS overnight. Within a few years, all card terminals in the world
will be NFC enabled and accepting contactless payment.

The effect on Seqr as a business will be very profound. Seqr's largest
bottleneck up to now has been the slow uptake from merchants. Up to
the moment we launched contactless, we had to sign individual and
bilateral agreements with each and every merchant. Now, Seqr does not
have to deal with the merchants at all. If they accept card payments,
they accept Seqr. This means that we can focus our sales and
marketing efforts on consumer acquisition instead.

After the end of the quarter, we also released another exiting product
for our users: Real time global peer to peer transfers. Our users can
now send money to each other in real time wherever they are in the
world. This is a revolutionary product which we believe that our
users will appreciate greatly.

The Seamless group reports strong figures for the quarter. Our
daughter company SDS (Seamless Distribution Systems) is doing
particularly well with a year on year revenue growth of 29 percent
and a growth in profit of 174 percent to approximately 10 MSEK. We
are very satisfied with this development and we see further strong
growth potential in the core offering of this business as well as
some exciting product development.

In the sub-group Seamless E-products, the revenue shrunk but the
result improved greatly from a loss of in excess of 3 MSEK to a loss
of only three hundred thousand SEK. In this business, we also expect
a continued strong improvement in both revenue and results.

Our sub-group Seqr increased its revenues from 1.8 MSEK to 2.6 MSEK,
an increase of 45 percent. The result improved with 11 percent to a
loss of 22.2 MSEK from a loss of 25.0 MSEK in 2015. We continue to
see improvements going forward and expect that our contactless
technology will accelerate the positive development further.

For our group as a whole, profit after tax improved with 28 percent
and the trend toward total group profitability continues.

Today, the daughter companies and businesses of Seamless represent
substantial values for our shareholders. As the stock market tends to
adjust towards reasonable valuations over time, we are confident that
these intrinsic values will be reflected in our share price.

Our company has only one goal: to create maximum value for our
shareholders.

Best Regards,
Peter Fredell
This is the type of information that Seamless Distribution AB (publ)
is required to disclose pursuant to the Securities Market Act and/or
the Financial Instruments Trading Act. The information was submitted
for publication on November 17, 2016 at 08:50 a.m. (CET).

CONTACT DETAILS
For further information, please contact:
Peter Fredell, CEO
Peter.fredell@seamless.se +46 8 564 878 00
ABOUT SEAMLESS
Seamless is one of the world's largest suppliers of payment systems
for mobile phones. Founded in 2001 and active in 39 countries,
Seamless handles more than 4.3 billion transactions annually through
675 000 active sales outlets. Seamless has three main business areas
including the SDS/transaction switch, the technology provider for the
distribution of e-products and the mobile payment platform SEQR.
Seamless shares are traded on NASDAQ OMX Stockholm www.seamless.se

The Seamless Interim Report 2016 for the period July- September 2016
has been approved for publication by the Board of Directors, by its
decision on November 16, 2016. This financial report has been
subjected to a review by the Company's auditors.

-----------------------------------------------------------
http://news.cision.com/seamless-distribution-ab/r/interim-report--third-...
http://mb.cision.com/Main/4815/2124470/591084.pdf

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