2014-02-25 07:30:00 CET
2014-02-25 07:30:04 CET
REGULATED INFORMATION
Innofactor Oyj - Financial Statement Release
Innofactor Plc financial statement 2013 (IFRS)
Innofactor Plc Financial Statement Release February 25, 2014, at 8:30 Finnish
time
Summary
mo. 10-12 mo. Change mo. 1-12 mo. Change
/2013 10-12/ /2013 1-12/
2012 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, EUR thousand 11,090 6,297 +76.1% 32,685 18,818 +73.7%
Growth of net sales +76.1% +22.6% +73.7% +9.4%
Operating margin 1,321 1,036 +27.6% 3,284 1,215 +170.3
(EBITDA), EUR thousand %
percentage of net sales* 11.9% 16.4% 10.0% 6.5%
Operating profit/loss 986 869 +13.4% 2,255 620 +263.7
(EBIT), EUR thousand* %
percentage of net sales* 8.9% 13.8% 6.9% 3.3%
Earnings before taxes, 1,025 860 +19.1% 1,863 591 +215.2
EUR thousand** %
percentage of net 9.2% 13.7% 5.7% 3.1%
sales**
Earnings, EUR thousand** 776 816 -5.0% 1,407 449 +213.4
%
percentage of net 7.0% 13.0% 4.3% 2.4%
sales**
Net gearing 55.9% 5.4% 55.9% 5.4%
Equity ratio 43.1% 66.1% 43.1% 66.1%
Personnel on average 392 197 +98.9% 307 189 +62.4%
during the review
period
Earnings per share (EUR) 0.0216 0.0272 -20.7% 0.0432 0.0150 +187.1
%
* The second quarter of 2013 included one-off costs related to the atBusiness
Oy acquisition for about EUR 164 thousand, and also cost reserves related to
the integration for about EUR 200 thousand, a total of about EUR 364 thousand.
The last quarter of 2013 included one-off costs related to acquisitions for
about EUR 182 thousand, and also costs and cost reserves related to the
integration for about EUR 277 thousand, a total of about EUR 459 thousand. The
last quarter of 2013 included a one-off profit of EUR 158 thousand.
** The second quarter of 2013 included one-off costs related to the atBusiness
Oy acquisition for about EUR 370 thousand (of which EUR 206 thousand were costs
related to organizing the loans), and also cost reserves related to the
integration for about EUR 200 thousand, a total of about EUR 570 thousand. The
last quarter of 2013 included one-off costs related to acquisitions for about
EUR 662 thousand (of which the financial expenses for the additional purchase
price related to the acquisition were EUR 480 thousand), and also costs and
cost reserves related to the integration for about EUR 277 thousand, a total of
about EUR 939 thousand. The last quarter of 2013 included one-off profit of EUR
158 thousand and also financial income of EUR 758 thousand for the additional
purchase price related to the acquisition, a total of about EUR 916 thousand.
Innofactor's net sales in 2014 are expected to be about EUR 43-48 million
(2013: EUR 32.7 million). The operating margin (EBITDA) in 2014 is expected to
be about EUR 4-6 million (2013: EUR 3.3 million).
The annual figures in this financial statement have been audited. The figures
include the acquired atBusiness Oy (current Innofactor Business Solutions Oy)
as of June 1, 2013, and the acquired Enabling Group in the balance sheet of
December 31, 2013. Further details about the acquisitions can be found in this
report's section "Acquisitions and changes in the group structure."
Reporting
Innofactor operates on a single segment, offering software, systems and related
services.
CEO Sami Ensio's review
In the last quarter of 2013, Innofactor continued profitable growth in
accordance with its strategy. The growth of net sales was 76.1 percent and
operating profit (EBITDA) was 11.9 percent of the net sales. Measured in net
sales (EUR 11.0 million) and EBITDA (EUR 1.3 million), this was the best
quarter ever in the company's history. This was the sixth successive best
quarter compared to the corresponding quarters in previous years. This proves
that on the last quarter of 2013, Innofactor has yet again been able to realize
its selected growth strategy persistently and successfully.
For the entire year of 2013, the growth in net sales was 73.7 percent and the
operating margin (EBITDA) was 10.0 percent of the net sales (without the
one-off items, 12.1 percent) During 2013, Innofactor's share price rose 162.5
percent and the trading of the share in the stock exchange increased by 225.2
percent. It can be said that 2013 was a successful year for Innofactor. Also,
Kauppalehti and Balancing Consulting selected Innofactor as the most successful
company in the stock exchange in 2013, based on the growth in net sales,
profitability and good share price development.
In 2013, Innofactor made several important business arrangements. In June 2013,
Innofactor acquired the entire share capital of atBusiness Oy. atBusiness was
one of Finland's leading providers of Microsoft-based solutions and it had an
excellent customer base, good indications of rapid growth and a strategy that
was almost identical with Innofactor. The net sales of atBusiness in 2012 were
EUR 17.4 million and EBITDA was EUR 2.7 million (15.3 percent of the net
sales). The acquisition provides Innofactor with improved conditions for
implementing its growth strategy in the Nordic countries and for offering
software products and services through its own channel.
In September, Innofactor acquired the Finnish company Dynamic Team and this
expanded its offering into Microsoft Dynamics AX ERP systems. In December 2013,
Innofactor acquired a Danish provider of SharePoint solutions, Enabling, and
this acquisition expanded the company's size in Denmark significantly.
At the end of 2013, Innofactor's new head office gathered all the employees in
the metropolitan area together into the new Innofactor Campus in Keilaniemi,
Espoo. Designed by Aarne Ervi, the personal and unique 1950's environment with
green areas and a seaside sauna will inspire our employees to further improve
their performance.
Due to the acquisitions and centralizing of operations, we think that
Innofactor has good prerequisites to continue growing its operations profitably
in 2014. Innofactor's strategy supports well the change in the markets and we
believe that we can also benefit from any future growth in the IT market.
Innofactor is still actively looking for new strategic partnerships in the
Nordic countries. The group will seek growth, which can be organic or based on
mergers or acquisitions.
Market outlook and business environment
Due to long-standing uncertainties in the economic situation, it is challenging
to make a reliable estimate on the development of the IT market in the near
future. According to research companies monitoring the IT market, the IT
service markets grew globally about 2-3 percent in 2013 and the growth is
expected to increase to about 4-5 percent in 2014. The growth in the business
software market was estimated to be about 5 percent globally in 2013 and it is
estimated to grow about 6-7 percent in 2014.
The IT market is changing. Four global mega trends can be observed. First,
using information technology and information systems is increasingly
transferring into the cloud. The cloud will connect people, data, services and
hardware into one global whole. The benefits of the cloud are cost-efficiency
and flexibility. It is estimated that 70% of companies either already use cloud
solutions or are planning to start using them. In the future, customers
increasingly want to buy flexible services fitting their needs at the time, not
so much large one-off delivery projects.
Second, the growth in the importance of social media that started with
consumers is transferring to companies. Information systems are more and more
expected to enable flexible communications between people and different
systems, between employees, customers and partners. Approximately 57 percent of
large companies are planning to invest in social media solutions in 2014.
Third, mobile devices and convergence of devices change how people behave at
work and in their leisure time. People want their preferred common and personal
services and same usability regardless of time, place and device used. IT is
consumerizing. An increasingly larger part of IT purchases in companies are
made on the conditions of individuals, that is, consumer markets. It is
estimated that the number of mobile workforce will increase to 1.3 billion by
2015, which is approximately 37 percent of the entire global workforce.
Fourth, the cloud, social media and mobile devices are estimated to increase
the amount of data saved globally by about 30-50 percent every year. Analyzing
this so-called Big Data will offer plenty of possibilities for developing the
operations of companies and the public sector and also new business models.
Innofactor believes that Microsoft—and thus, companies operating in the
Microsoft ecosystem—will have a strong position on the changing IT market.
Microsoft has the leading position in consumer and business software, a
competitive offering and strong proof of very rapid growth in cloud services.
Additionally, the acquisition of the Nokia mobile device business will give
Microsoft a strong position in device markets. To maintain its leading
position, Microsoft invests in product development significantly more than its
competitors. In calendar year 2013, Microsoft's investments in product
development were about USD 11 billion, whereas the corresponding investments by
Google were about USD 8 billion, IBM about USD 6 billion, and Apple about USD 5
billion.
Innofactor believes that this development will create markets with long term
growth for companies like itself that are strongly committed to Microsoft.
As concerns Microsoft-based solutions, competition in the Nordic Countries is
divided between different kinds of parties. The first group is formed by large
companies that operate in all of the Nordic Countries, such as Tieto, CGI and
Accenture (for Microsoft solutions, Accenture's subsidiary Avanade). Typically,
these companies offer a wide range of IT solutions for companies and
organizations, using several competing technologies of which Microsoft
technology is one option.
The second group is formed by companies that focus on a narrower solution area
in the Nordic level, for example, Affecto and Platon in the Business
Intelligence area. These companies also offer IT solutions for companies and
organizations using several competing technologies of which Microsoft
technology is typically one option.
The third group is formed by companies operating in just one country. These
small or medium-sized companies often focus on one solution area, partner
and/or field. For example, in the association and parish sector, there are
national software providers specialized in these fields. There are also
specialized providers for these fields for the selected solutions, such as
network services, case management and customer relationship management systems.
Innofactor has made a strategic choice by focusing on solutions implemented
with and utilizing the Microsoft platforms and by selecting as its solution
areas the ones in which Microsoft's growth, and thus its partners' and
ecosystem's growth, has exceeded the general average growth of IT service and
software markets many times over. Innofactor is primarily focused on large and
medium-sized companies and public sector organizations, which have a high level
of requirements for their IT solution acquisitions.
Innofactor's competitive edge is based on a strategy, which differs from its
competitors' strategies and which focuses on providing a wide range of
Microsoft-based solutions for companies and organizations and also utilizing
its own software and products. Innofactor has a leading position in and
understanding of the Microsoft ecosystem in the Nordic countries. Innofactor
has one of the largest solution, product and service offerings based on
Microsoft platforms in Europe. Profound understanding and good reputation in
several customer verticals in the private, public and third sectors makes it
possible to develop business operations so that they will serve the customers
even better. Innofactor considers itself able to provide solutions that are
competitive when compared to its competitors.
Microsoft's partner network in the Nordic countries and also elsewhere in
Europe is quite fragmented and mainly consists of a large number of small and
medium-sized local providers typically focused on one solution area. For
Innofactor, this provides interesting potential for consolidation and
internationalization. Innofactor's good reputation, unique proofs of rapid and
profitable growth and successful acquisitions together with its entrepreneurial
business culture make it a very attractive partner when making reorganizations
in the field in the Nordic countries.
Future outlook
Innofactor's net sales in 2014 are expected to be about EUR 43-48 million
(2013: EUR 32.7 million). The operating margin (EBITDA) in 2014 is expected to
be about EUR 4-6 million (2013: EUR 3.3 million).
Board of Directors' proposal on the dividend
Innofactor is a growing company and intends to use its operating profit on
actions promoting growth, for example, on realizing mergers. Innofactor has
defined a dividend distribution policy according to which the aim of the Board
of Directors is to provide an opportunity for the shareholders to distribute,
from the part of the operating margin (EBITDA) that exceeds 10 percent, the
maximum dividend allowed by the state of the business. For 2013, EBITDA was
10.0 percent. In making the proposal on the dividend, the Board of Directors
takes into account the company's financial situation, profitability and
near-term outlook.
At the end of the financial period of 2013, the distributable assets of the
group's parent company were EUR 32,722,231.76.
The Board of Directors proposes that Innofactor Plc should not pay any dividend
for the financial period of 2013.
Espoo, February 25, 2014
INNOFACTOR PLC
Board of Directors
Additional information:
CEO Sami Ensio, Innofactor Plc
Tel. +358 50 584 2029
sami.ensio@innofactor.com
Briefings concerning the financial statement of 2013
On February 25, 2013, at 9:00 Finnish time, Innofactor will hold a briefing
concerning the financial statement in Finnish for the media, investors and
analysts at the company's premises at Keilaranta 9, Espoo. The report will be
presented by CEO Sami Ensio and CFO Mikko Karvinen. The presentations of the
briefing will be available on Innofactor's web site after the briefing.
We ask you to register for the briefing beforehand either by sending email to
ir@innofactor.com or by phoning to +358 40 733 6740 (Noora Kirjavainen).
Innofactor will also hold a conference call in English for analysts, media and
investors on February 25, 2014, at 16:00 Finnish time. Registrations to
ir@innofactor.com at least one hour before the event.
Financial releases in 2014
The annual report for 2013 will be published on the company's web site onFebruary 27, 2014. The Annual General Meeting will be held on March 20, 2014,
at 9:00 Finnish time.
The schedule for financial releases in 2014 is as follows:
April 9-April 22, 2014: Silent period
April 23, 2014: Interim report January-March
July 8-July 21, 2014: Silent period
July 22, 2014: Interim report January-June
October 7-October 20, 2014: Silent period
October 21, 2014: Interim report January-September
Distribution:
NASDAQ OMX Helsinki
Main media
www.innofactor.com
Innofactor is one of the leading Nordic IT solution providers focused on
Microsoft platforms. Innofactor delivers business critical solutions and
maintenance services as a system integrator and develops its own software
products and services. Innofactor's own product development is focused on
Microsoft's Windows Azure based cloud solutions. Innofactor's customers include
over 1,000 private and public sector organizations in Finland, Denmark, Sweden
and elsewhere in Europe. The company has over 400 motivated and skilled
employees in a number of locations in Finland, Denmark, Sweden and Russia. From
2009 to 2013, Innofactor's annual net sales growth has been 43% on average.
Leading Finnish business media Kauppalehti selected Innofactor as the most
successful company on the Finnish stock exchange in 2013. The Innofactor Plc
share is listed in the technology section of the main list of NASDAQ OMX
Helsinki Oy.
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