2022-08-09 14:00:00 CEST

2022-08-09 14:00:16 CEST


REGULATED INFORMATION

English
Digia Oyj - Half Year financial report

Digia Plc Half-year Financial Report January-June 2022


Digia Plc Stock exchange release 9 August 2022 at 3:00 pm EET

A year of renewal: Net sales for January-June were up by 7.3 per cent and EBITA
margin amounted to 8.7 per cent

April-June 2022

  · Net sales: EUR 41.2 (38.6) million, up 6.7 per cent
  · Operating profit (EBITA): EUR 2.1 (3.5) million, down 38.4 per cent;
EBITA margin: 5.2 (9.0) per cent of net sales
  · Operating profit: EUR 1.5 (2.7) million, down 43.2 per cent;
operating margin: 3.7 (7.0) per cent of net sales
  · Earnings per share: EUR 0.06 (0.08)
  · New management system integrated into operational activities. The deployment
of the system significantly burdened the result for April-June.
  · Acquisition of MOST Digital Oy on 2 May 2022
  · Agreement on the acquisition of the entire share capital of Productivity
Leap Oy on 27 June 2022

January-June 2022

  · Net sales: EUR 83.7 (78.0) million, up 7.3 per cent
  · Operating profit (EBITA): EUR 7.3 (8.7) million, down 16.7 per cent;
EBITA margin: 8.7 (11.2) per cent of net sales
  · Operating profit (EBIT): EUR 6.1 (7.2) million, down 15.1 per cent;
operating margin: 7.3 (9.2) per cent of net sales
  · Earnings per share: EUR 0.19 (0.21)
  · Return on investment: 12.6 (15.6) per cent
  · Equity ratio: 44.2 (44.4) per cent
  · Deployment of the Digia Business Engine management system
  · Profit guidance remains unchanged: Digia's net sales will grow year-on-year
and its EBITA margin will be over 10 per cent of net sales.

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

Group key figures

EUR 1,000           4-6/    4-6/  Change,     1-6/     1-6/  Change,     2021
                                        %                          %
                    2022    2021              2022     2021
Net sales         41,240  38,638      6.7   83,701   77,995      7.3  155,939
Operating profit   2,143   3,481    -38.4    7,276    8,737    -16.7   17,739
(EBITA)
- as a % of net     5.2%    9.0%              8.7%                      11.4%
sales                                                 11.2%
Operating profit   1,540   2,711    -43.2    6,087    7,167    -15.1   14,680
(EBIT)
- as a % of net     3.7%    7.0%              7.3%     9.2%              9.4%
sales
Result for the     1,474   2,003    -26.4    5,132    5,547     -7.5   11,772
period
- as a % of net     3.6%    5.2%              6.1%     7.1%              7.5%
sales

Return on                                    15.3%    18.1%             18.3%
equity, %
Return on                                    12.6%    15.6%             16.3%
investment, %
Cash flow from                               8,799             -13.8   16,648
operations                                          10,209
Interest-bearing                            15,681   16,828    -6.8    10,663
net liabilities
Net gearing, %                               23.6%    27.0%             15.7%
Equity ratio, %                              44.2%    44.4%             48.0%

Number of                                    1,397    1,329      5.1    1,339
personnel at
period-end
Average number     1,386   1,331      4.1    1,368    1,327      3.1    1,334
of personnel
Shareholders'                               66,353   62,252      6.6   68,072
equity
Balance sheet                              154,590  141,291      9.4  143,040
total
Earnings per        0.06    0.08    -25.5     0.19     0.21     -6.5     0.44
share, EUR
Earnings per        0.06    0.07    -25.6     0.19     0.21     -6.6     0.44
share (diluted),
EUR

CEO's Review:

“2022 is a year of business renewal and investments in growth - it is also the
last year in our 2020-2022 strategy period. During the review period, we
overhauled our organisation, operating methods and the systems that guide our
operations. These measures support our organic and inorganic growth, enhance our
competitiveness and improve the quality of our customer implementations. I'm
extremely pleased that we have deployed the largest transformation project in
Digia's history - the Digia Business Engine (DBE) management system - as
planned.

Our net sales were up 6.7 per cent in April-June and amounted to EUR 41.2 (38.6)
million. The second-quarter EBITA margin was 5.2 (9.0) per cent. The margin was
significantly impacted by the deployment of the Digia Business Engine:
substantial outlays on personnel training were made in April-June, and the time
spent on deployment also reduced invoicing rates during the review period.
Profitability was also weakened by the higher-than-normal number of sick leave
days. In addition, there were more vacation days in the review period than in
the comparison period. In January-June, our net sales were up 7.3 per cent to
EUR 83.7 (78.0) million, and the EBITA margin was 8.7 (11.2) per cent. I believe
that our profitability will improve in the latter half of the year.

DBE is a digital transformation project and its deployment has required a lot of
time and learning new things. It has changed our day-to-day operative activities
and the ordinary working methods of each and every Digia employee. In
April-June, we capitalised EUR 0.2 million in costs from the project, which had
a cost impact of EUR -1.3 million. In January-June, the project had a cost
impact of EUR -2.2 million. We have capitalised a total of EUR 3.9 million from
this project to date. The cost impact of the project will decrease significantly
in the third quarter; after that, we will switch over to ordinary further
development.

In addition to renewing Digia's internal operations, we made outlays on service
offering development and acquisitions to ensure future growth. In May, we
expanded our scalable services with Robotics as a Service capabilities by
acquiring the entire share capital of MOST Digital Oy. The acquisition
strengthens our integration and API business expertise and growth with
automation platform services. Post-acquisition integration has progressed
smoothly and the first joint deals have already been made.

On 27 June, we announced that we would acquire the entire share capital in
Productivity Leap Oy. The acquisition was completed on 1 July and it bolsters
our position not only in knowledge management, but also in the social welfare
and healthcare sector in particular - we see opportunities for significant
growth in the transformation of this sector. Together with Productivity Leap, we
are creating an even stronger offering for this market when competing for
transformation projects in the social welfare and healthcare sector and
knowledge management.

The major new customer agreement in the Financial Platforms business during the
review period was the sale of a fund system solution based on Digia's own DiFS
product to Aktia Fund Management Company Ltd. In addition, we announced the new
SaaS-based Back Office service we productised for small operators in the
financial sector. The first customer deliveries were made during the review
period.

Digia has become a strong partner in the Finnish higher education sector, where
our company has many customers. In June, Digia was selected to provide an expert
partner service to Aalto University, covering Microsoft solution development,
consulting on their application platforms and products, and the maintenance of
application platforms and solutions. After the review period, Digia was also
selected as a supplier for CSC - IT Center for Science's Digivisio 2030 project.
This is a joint project of all 38 Finnish higher education institutions that
aims to create a learning platform that will benefit higher education
institutions, students and our society alike. The total value of this project
that runs from 2022 to 2026 is about EUR 30-35 million, of which Digia's share
is around EUR 10.5-12.5 million.

Digia has a strong position as a provider of Microsoft D365 systems - Microsoft
selected Digia as its Smart Business Solutions/Dynamics 365 Partner of the Year
in Finland for the second time in a row. During the review period, we delivered
projects to Marimekko, the Kanta-Häme Hospital District and Kalevala Jewelry.

Digia's business is not exposed to direct Russia-related risks. We are keeping a
close eye on the global economic situation and continuously assess risks with
respect to customers, partners and cyberthreats.

I would like to warmly thank all Digia employees for your great efforts in the
deployment of the new system and the renewal of operating methods. This is an
important step on our growth path towards even smoother day-to-day life and more
efficient service models.“

Events after the review period

Digia Plc and Productivity Leap Oy signed an agreement on 27 June 2022 by which
Digia purchased Productivity Leap's entire capital stock. The acquisition was
completed on 1 July 2022.

Briefing invitation

A briefing for analysts will be held at 4:00 pm on Tuesday, 9 August 2022 as a
Teams meeting. Attendance instructions have been emailed to participants.

CEO Timo Levoranta will give a webcast on the results starting at 5:15 pm at
https://digia.videosync.fi/2022-puolivuosikatsaus

The material and presentation for the event will be available from 4:00 pm on 9
August 2022 on the company's website: digia.com/en/investors/reports-and
-presentations.

Publication of the next financial results

Digia will publish its business review for January-September 2022 at 8:00 am on
28 October 2022.

For further information, please contact:

President & CEO Timo Levoranta, tel. (exchange) +358 (0)10 313 3000

Distribution

Nasdaq Helsinki
Key media
digia.com

Digia is a software and service company that helps its customers renew
themselves in the networked world. There are more than 1,300 of us working at
Digia. Our roots are in Finland and we operate both in our home country and
internationally. We are building a world in which digitalisation makes a
difference - together with our customers and partners. Digia's net sales
totalled EUR 156 million in 2021. The company is listed on Nasdaq Helsinki
(DIGIA). digia.com