Digia Oyj - Interim report (Q1 and Q3)

Digia Plc's Business Review January-March 2024 (unaudited)

Digia Plc
Stock exchange release
8 May 2024 at 8:00 EEST

Digia's profitable growth continued: net sales up 7.2 per cent in the first
quarter, operating profit (EBITA) up 13.2 per cent

January-March 2024

  · Net sales: EUR 53.6 (50.0) million, up 7.2 per cent
  · Operating profit (EBITA): EUR 5.5 (4.9) million, up 13.2 per cent; EBITA
margin: 10.3 (9.7) per cent of net sales
  · Operating profit (EBIT): EUR 4.8 (4.1) million, up 14.8 per cent; operating
margin: 8.9 (8.3) per cent of net sales
  · Earnings per share: EUR 0.13 (0.11)
  · Return on equity (ROE): 18.4 (17.2) per cent
  · Equity ratio: 43.8 (43.1) per cent
  · Profit guidance remains unchanged: Digia's net sales (EUR 192.1 million in
2023) and operating profit (EBITA) (EUR 16.7 million in 2023) will increase
compared to 2023.

Unless otherwise stated, the comparison figures provided in parentheses refer to
the corresponding period of the previous year.

Group key figures

+---------------------------------+--------+--------+---------+---------+
|EUR 1,000                        |1-3/2024|1-3/2023|Change, %|1-12/2023|
+---------------------------------+--------+--------+---------+---------+
|Net sales                        |53,648  |50,034  |7.2%     |192,087  |
+---------------------------------+--------+--------+---------+---------+
|Operating profit (EBITA)         |5,510   |4,870   |13.2%    |16,727   |
+---------------------------------+--------+--------+---------+---------+
|- as a % of net sales            |10.3%   |9.7%    |         |8.7%     |
+---------------------------------+--------+--------+---------+---------+
|Operating profit (EBIT)          |4,751   |4,137   |14.8%    |13,835   |
+---------------------------------+--------+--------+---------+---------+
|- as a % of net sales            |8.9%    |8.3%    |         |7.2%     |
+---------------------------------+--------+--------+---------+---------+
|Result for the period            |3,415   |3,021   |13.0%    |9,872    |
+---------------------------------+--------+--------+---------+---------+
|- as a % of net sales            |6.4%    |6.0%    |         |5.1%     |
+---------------------------------+--------+--------+---------+---------+
|                                 |        |        |         |         |
+---------------------------------+--------+--------+---------+---------+
|Return on equity, %              |18.4%   |17.2%   |         |13.5%    |
+---------------------------------+--------+--------+---------+---------+
|Return on investment, %          |17.0%   |16.2%   |         |12.9%    |
+---------------------------------+--------+--------+---------+---------+
|Interest-bearing net liabilities |22,060  |18,802  |17.3%    |24,771   |
+---------------------------------+--------+--------+---------+---------+
|Net gearing, %                   |30.1%   |27.1%   |         |32.8%    |
+---------------------------------+--------+--------+---------+---------+
|Equity ratio, %                  |43.8%   |43.1%   |         |46.7%    |
+---------------------------------+--------+--------+---------+---------+
|                                 |        |        |         |         |
+---------------------------------+--------+--------+---------+---------+
|Number of personnel at period-end|1,547   |1,451   |6.6%     |1,527    |
+---------------------------------+--------+--------+---------+---------+
|Average number of personnel      |1,544   |1,441   |7.1%     |1,465    |
+---------------------------------+--------+--------+---------+---------+
|Shareholders' equity             |73,215  |69,444  |5.4%     |75,420   |
+---------------------------------+--------+--------+---------+---------+
|Balance sheet total              |173,770 |166,731 |4.2%     |168,157  |
+---------------------------------+--------+--------+---------+---------+
|Earnings per share, EUR          |0.13    |0.11    |12.1%    |0.37     |
+---------------------------------+--------+--------+---------+---------+
|Earnings per share (diluted), EUR|0.13    |0.11    |13.0%    |0.37     |
+---------------------------------+--------+--------+---------+---------+

CEO's Review:

“I'm pleased that despite the challenging market situation, we achieved the
highest net sales and operating profit (EBITA) in Digia's history in the first
quarter. In addition to growth, we also improved our profitability.

In January-March, our net sales grew by 7.2 per cent to EUR 53.6 (50.0) million.
Organic growth was 1.5 per cent. Our operating profit (EBITA) increased by 13.2
per cent to EUR 5.5 (4.9) million. Our EBITA margin improved to 10.3 (9.7) per
cent of net sales.

The market situation remained challenging in the first quarter: Competition
continued to be tight, and the general economic situation resulted in
cautiousness among customers, which was evident in delays in decision-making,
for instance. We see an ongoing trend in customers' purchasing behaviour, in
which they are centralising their purchases and relying on stable operators with
broader expertise and offerings. Digia competes in the market with its strong
expertise and versatile overall offering.

Digia's offering consists of four service areas, three of which increased their
net sales during the review period. In the service areas, particularly strong
growth was seen in Digia's automation and AI platform and CRM solutions.

Demand for Digia's automation and AI platform remained strong, with a robust bid
volume. Net sales in this area increased by more than 50 per cent in relation to
the comparison period. Digia's platform has proven itself to be a concrete and
rapid means of harnessing automation and AI in business processes. The
automation and AI platform is part of the ISO 27001-certified operations of our
Managed Services area. The market breakthrough of AI will continue in 2024-2025.
Digia's automation and AI platform business has already surpassed the annual
sales milestone of five million euros. We will continue to invest in utilising
AI in both our own operations and customer offerings.

Our CRM solutions also grew by 25 per cent during the review period. Our
solutions combine Digia's service design, marketing automation and integration
expertise, and Microsoft CRM and Power Platform solutions.

Furthermore, our net sales were boosted by Top of Minds, a Swedish company which
joined Digia in October 2023. The company also saw good organic growth.
International business accounted for 12.3 per cent of our net sales in the
review period.

The service and maintenance business is an important element in Digia's business
model. The service and maintenance business accounted for 50.6 per cent and the
project business for 49.4 per cent of net sales in the review period. The
significant share accounted for by the service and maintenance business provides
stability to Digia's operations in the uncertain market.

Major agreements were signed during the review period with the Finnish Ice
Hockey Association, Servica Oy and the City of Helsinki, among others. We also
made an agreement with the Finnish Defence Forces on additional procurements for
a network information system provided by Digia. In addition to software
licences, this includes expert work to be carried out in 2024-2030. In addition,
we made further agreements valued at EUR 15.2 million. In March, we deployed R
-Kioski's ERP system into production. It is based on Microsoft Dynamics 365
Finance and Operations and Microsoft Dynamics 365 Commerce solutions.
Marimekko's global Microsoft Dynamics 365 Commerce store solution was moved
under continuous services.

Personnel and sustainability

Our number of personnel increased by 20 new experts in the first quarter. During
the review period, we forged ahead with our responsibility development efforts.
Digia completed the UN Global Compact Network Finland Target Gender Equality
training programme, which focused on issues such as promoting gender equality
and diversity. In addition, we signed the Women's Empowerment Principles
established by UN Women and UN Global Compact. We believe that a diverse and
inclusive work community is the key to the company's sustainable success.

As part of the continuous improvement of Digia's operations, we decided to
modernise our premises in Helsinki. The aim is to facilitate hybrid work,
strengthen our sense of community, reduce Digia's carbon footprint and achieve
cost savings. We will change over to a two-office model — we will renovate our
current premises in Pitäjänmäki and open a new office in Kamppi in the heart of
Helsinki. Digia's new office strategy will achieve total cost savings of about
EUR 0.5 million annually. In addition, the shift will have a positive impact on
CO2 emissions from Digia's own operations. The office modernisation will be
carried out in the first half of 2025.

2024 is the second year in our three-year strategy period. Intelligent business
forms the core of our strategy: automation and intelligence are becoming an
increasingly integral aspect of all services, solutions and processes. Our
mission is to keep our customers at the forefront of digital evolution. There is
still short-term uncertainty in the market, but we foresee healthy market growth
in the longer term. We are constantly renewing and adjusting our operations in
line with market conditions. Our aim is to build sustainable and profitable
growth - we have now been on this journey for eight years.

After the end of the review period, we announced changes in Digia's Management
Team. Tapani Ojaluoma was appointed as the new head of the Business Platforms
service area, effective as from 2 April 2024. I welcome Tapani to Digia to build
future profitable growth!”

Profit guidance for 2024 remains unchanged

Digia's profit guidance for 2024: Digia's net sales (EUR 192.1 million in 2023)
and operating profit (EBITA) (EUR 16.7 million in 2023) will increase compared
to 2023.

Events after the review period

There have been no major events since the report period.

Briefing invitation

A briefing for analysts will be held at 9 am on Wednesday, 8 May 2024 as a Teams
meeting. Attendance instructions have been emailed to participants.

The material and presentation for the event will be available from 9:00 am on 8
May 2024 on the company's website:  digia.com/en/investors/reports-and
-presentations (https://digia.com/sijoittajat/raportit-ja-presentaatiot/).

Financial reporting in 2024

Digia will publish its half-year interim report for 2024 at 8:00 am on Friday, 9
August 2024, and its business review for January-September 2024 at 8:00 am on
Friday, 25 October 2024.

For further information, please contact:

President & CEO Timo Levoranta,
Tel. +358 40 500 2050

Distribution

Nasdaq Helsinki
Key Media
digia.com

Digia is a software and service company that combines technological
possibilities and human capabilities to build intelligent business, society and
a sustainable future. Our mission is to ensure that our customers are at the
forefront of digital evolution. There are more than 1,500 of us working at Digia
and we operate globally with our customers. Digia's net sales totalled EUR 192.1
million in 2023. The company is listed on Nasdaq Helsinki (DIGIA). digia.com

Attachments:

05075250.pdf