2012-07-31 07:30:00 CEST
2012-07-31 07:30:04 CEST
REGULATED INFORMATION
Innofactor Oyj - Interim report (Q1 and Q3)
Innofactor Plc's interim report for January 1–June 30, 2012 (IFRS)
Innofactor Plc Interim Report July 31, 2012, at 8:30 Finnish time
Summary
Innofactor group's key figures for April 1-June 30, 2012:
-- Net sales EUR 3,982 thousand (2011: 4,360), decrease of 8.7%
-- Operating profit before depreciation and amortization (EBITDA), EUR -108
thousand (2011: 275), decrease of 139.3%
-- EBITDA percentage -2.7% (2011: 6.3%)
-- Operating loss (EBIT) EUR -251 thousand (2011: 142), decrease of 276.8%
-- EBIT percentage -6.3% (2011: 3.3%)
Innofactor group's key figures for January 1-June 30, 2012:
-- Net sales EUR 7,954* thousand (2011: 8,303), decrease of 4.2%*
-- Operating profit before depreciation and amortization (EBITDA), EUR -316**
thousand (2011: 425), decrease of 174.4%
-- EBITDA percentage -4.0%** (2011: 5.1%)
-- Operating loss (EBIT) EUR -598** thousand (2011: 161), decrease of 471.4%**
-- EBIT percentage -7.5%** (2011: 1.9%)
The future outlook for Innofactor remains the same. There are notable
uncertainties related to the outlook for 2012 due to the instability of the
global financial situation, so no detailed estimate of the outlook can be
provided. In 2012, the organic growth of Innofactor is estimated to continue
(2011: net sales were EUR 17,205 thousand). The profitability of the business
operations is expected to remain positive.
The figures in this interim report have not been audited. The figures do not
include the Danish company Bridgeconsulting A/S, acquired on June 25, 2012,
which will be taken into account as of July 2012 according to acquisition
closing date July 5, 2012. More detailed information of the acquisition can be
found in report section “Acquisitions and changes in the group structure”.
* Due to the organizational change on January 2, 2012, projects were
rearranged, which had a one-off effect of lowering the net sales in January by
about EUR 300 thousand.
** Due to the organizational change on January 2, 2012, projects were
rearranged, which had a one-off effect of lowering the net sales in January by
about EUR 300 thousand. Additionally, the personnel and office space
arrangements related to the organizational change led to a one-off cost of
about EUR 100 thousand. In total, these reduced the net sales by about EUR 400
thousand.
Key figures of the group, IFRS
mo. mo. Change mo. mo. Change mo.
4-6 4-6 1-6 1-6 1-12
/2012 /2011 /2012 /2011 /2011
Net sales, EUR thousand* 3,982 4,360 -8.7 % 7,954 8,303 -4.2 % 17,205
Operating profit before -108 275 -139.3 -316 425 -174.4 1,443
depreciation and % %
amortization (EBITDA),
EUR thousand**
percentage of net -2.7 % 6.3 % -4.0 % 5.1 % 8.4 %
sales**
Operating profit/loss -251 142 -276.8 -598 161 -471.4 904
(EBIT), EUR thousand** % %
percentage of net -6.3 % 3.3 % -7.5 % 1.9 % 5.3 %
sales**
Earnings before taxes, -251 139 -280.6 -598 155 -485.8 886
EUR thousand** % %
percentage of net -6.3 % 3.2 % -7.5 % 1.9 % 5.1 %
sales**
Earnings, EUR thousand** -248 108 -329.6 -592 121 -589.2 687
% %
percentage of net -6.2 % 2.5 % -7.4 % 1.5 % 4.0 %
sales**
Shareholders' equity, 12,846 12,399 +3.6 % 12,846 12,399 +3.6 % 12,905
EUR thousand
Return on equity*** -7.6 % 3.5 % -9.2 % 1.9 % 5.5 %
Return on investment*** -7.6 % 4.6 % -9.2 % 2.6 % 7.2 %
Net gearing -7.9 % -6.1 % -7.9 % -6.1 % -5.4 %
Equity ratio 76.8 % 75.6 % 76.8 % 75.6 % 74.5 %
Balance sheet total, EUR 18,430 17,967 +2.6 % 18,430 17,967 +2.6 % 18,324
thousand
Research and 655 654 1,347 1,246 2,086
development, EUR
thousand
percentage of net sales 16.4 % 15.0 % 16.9 % 15.0 % 12.1 %
Personnel on average 178 175 +1.7 % 181 173 +4.6 % 177
during the review
period
Personnel at the end of 181 185 -2.2 % 181 185 -2.2 % 189
the review period
Number of shares at the 30,165 29,261 +3.1 % 30,165 29,261 +3.1 % 29,261
end of the review ,900 ,800 ,900 ,800 ,800
period****
Earnings per share -0.008 0.0037 -321.6 -0.019 0.0041 -585.4 0.0235
(EUR)**** 2 % 9 %
Shareholders' equity per 0.426 0.424 +0.5 % 0.426 0.424 +0.5 % 0.441
share (EUR)****
* Due to the organizational change on January 2, 2012, projects were
rearranged, which had a one-off effect of lowering the net sales in January by
about EUR 300 thousand.
** Due to the organizational change on January 2, 2012, projects were
rearranged, which had a one-off effect of lowering the net sales in January by
about EUR 300 thousand. Additionally, the personnel and office space
arrangements related to the organizational change led to a one-off cost of
about EUR 100 thousand. In total, these reduced the net sales by about EUR 400
thousand.
*** The percentages for the return on equity and return on investment have been
adjusted to correspond with the figures for a 12-month period.
**** In accordance with the decision of the Innofactor Plc's Annual General
Meeting on April 28, 2011, twenty old shares were consolidated into one new
share (registered in the Trade Register on May 7, 2011), which reduced the
total number of shares to 1/20 of the previous number. The key figures
presented in the table have been adjusted to correspond with the current number
of shares.
Reporting
Innofactor operates on a single segment and mainly in Finland*, offering
software, systems and related services. No distribution of net sales or
earnings by segment or geographical area is therefore presented.
* On June 25, 2012, Innofactor Plc signed a contract on acquiring the Danish
company Bridgeconsulting A/S. This is described in more detail in the section"Acquisitions and changes in the group structure." The company operates mainly
in Denmark and will be consolidated into Innofactor information as of July,
2012.
CEO Sami Ensio's review
During April 1-June 30, 2012, Innofactor's net sales decreased by 8.7 percent
compared to the corresponding period last year.
During the review period, Innofactor signed a contract on June 25, 2012, to
acquire the entire share capital of Bridgeconsulting A/S and its parent company
Bridgeconsulting Holding ApS. The acquisition is significant for Innofactor's
globalization strategy. High level of competence and clientele of
Bridgeconsulting is a perfect complement to Innofactor's business operations.
Together we will be capable of serving our international customers faster and
more extensively as well as working to expand our clientele. The expansion of
our solution range in the Nordic countries will improve our competitiveness and
support our strategy of international growth. Acquisition of Bridgeconsulting
is the first step in international expansion of Innofactor's system integration
business and provides an excellent platform to grow a substantial
Microsoft-focused business in Denmark.
The effect on net sales related to the starting of the organizational change at
the beginning of 2012 continued to have an effect on Q2. In order to improve
profitability, Innofactor had cooperation negotiations in May 2012 in the
SharePoint Solutions unit. As a result, two persons were let go and two persons
were dismissed temporarily. Additionally, some smaller changes in the
organization and personnel changes in the management have been made and they
are expected to improve the operation of the organization.
The organization reform is essential for securing Innofactor's competitiveness
in the long run, for example, in relation to globalization and the acquisition
of Bridgeconsulting A/S, and it is expected to improve Innofactor's
competitiveness on the second half of the year.
There have not been any significant changes in the general market situation
compared to the previous quarter.
The development of net sales was affected by research and development costs
that were larger than on an average quarter. Research and development costs
recognized in the profit and loss statement for April 1-June 30, 2012, were EUR
655 thousand (2011: EUR 654 thousand), which is 16.4% of the net sales (2011:
15.0%).
Operating profit before depreciation and amortization (EBITDA) during April
1-June 30, 2012, was EUR 108 thousand (-2.7%) and operating loss (EBIT) was EUR
-251 thousand (-6.3%).
During the review period and after it, Innofactor secured several major deals,
for example, the Resource Booking System for the City of Espoo and the
SharePoint application maintenance service for VTT, which resulted in positive
development in the order book.
In the longer term, Innofactor is seeking a competitive advantage and
flexibility, for example, by increasing the productization level of its
solutions, the share of subcontracting and the use of lower-cost labor.
Innofactor continues to seek potential strategic partnerships in Finland and
neighboring countries. The group will seek growth, which can be organic or
based on mergers or acquisitions.
Market outlook and business environment
There have not been changes in the market outlook and business environment.
Due to the uncertainties in economic situation, it is impossible to make a
reliable estimate of the development of the IT market. During the previous
recession, the IT market reacted to the change less radically than many other
sectors. It can therefore be assumed that in a possible new recession, the
impacts will not be very dramatic, but it is difficult to present any figures.
The IT market is experiencing a clear turning point. One of the major trends is
the consumerization of information technology: an increasingly larger share of
the IT purchases made by companies is based on the requirements of the consumer
market. Company and corporate clients tend to purchase software that can be
used on phones, tablets and computers. Another trend is the ability of public
clouds to offer software in a scalable and global form to a wide range of end
users and for all devices, including mobile phones. Innofactor believes that
Microsoft is a strong player in this situation: it holds the leading position
in the business software market and invests heavily in mobile devices.
For companies like Innofactor, which is strongly committed to Microsoft, this
development creates growing global markets in the long term both as a
traditional system integrator as well as a provider of cloud and mobile
solutions. Innofactor sees that strong commitment to Microsoft brings
significant competitive advantages. As the companies focusing purely on
Microsoft products are typically small, Innofactor believes that they are
likely to be consolidating into larger units, and this will offer Innofactor
expansion opportunities.
Espoo, July 31, 2012
INNOFACTOR PLC
Board of Directors
Additional information:
CEO Sami Ensio
Innofactor Plc
Tel. +358 50 584 2029
sami.ensio@innofactor.com
Briefings concerning the interim report January 1-June 30, 2012
On July 31, 2012, at 9:00 Finnish time, Innofactor will hold a briefing
concerning the interim report in Finnish for the media and analysts at the
company's premises at Keilaranta 19, Espoo.
Innofactor will also hold a conference call in English for analysts, media and
investors on July 31, 2012, at 16:00 Finnish time. Registrations to
ir@innofactor.com at least one hour before the event.
Financial releases in 2012
The schedule for financial releases in 2012 is as follows:
October 16-October 30, 2012: Silent period
October 31, 2012, at 8:30 Finnish time: Interim report for January-September
Distribution:
NASDAQ OMX Helsinki
Main media
www.innofactor.com
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