2012-04-30 07:30:00 CEST
2012-04-30 07:30:05 CEST
REGULATED INFORMATION
Innofactor Oyj - Interim report (Q1 and Q3)
Innofactor Plc's interim report for January 1–March 31, 2012 (IFRS)
Innofactor Plc Stock Exchange Release April 30, 2012, at 8:30 Finnish time
Summary
Innofactor group's key figures for January 1-March 31, 2012:
-- Net sales EUR 3,972* thousand (2011: 3,943), increase of 0.7%*
-- Operating profit before depreciation and amortization (EBITDA), EUR -209**
thousand (2011: 150), decrease of 239.3%
-- EBITDA percentage -5.3%** (2011: 3.8%)
-- Operating profit (EBIT) EUR -347** thousand (2011: 19), decrease of
1,926.3%
-- EBIT percentage -8.7%** (2011: 0.5%)
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.
* 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 profitability by about EUR
400 thousand.
Key figures of the group, IFRS
mo. 1-3 mo. 1-3 Change mo. 1-12
/2012 /2011 /2011
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Net sales, EUR thousand* 3,972 3,943 +0.7% 17,205
Operating profit before -209 150 -239.3% 1,443
depreciation and amortization
(EBITDA), EUR thousand**
percentage of net sales** -5.3% 3.8% 8.4%
Operating profit (EBIT), EUR -347 19 -1,926.3% 904
thousand**
percentage of net sales** -8.7% 0.5% 5.3%
Earnings before taxes, EUR -347 16 -8.7% 886
thousand**
percentage of net sales** -8.7% 0.4% 5.1%
Earnings, EUR thousand** -344 13 -2,268.8% 687
percentage of net sales** -8.7% 0.3% 4.0%
Shareholders' equity, EUR 13,094 12,291 +6.5% 12,905
thousand
Return on equity*** -10.6% 0.4% 5.5%
Return on investment*** -10.6% 0.7% 7.2%
Net gearing -11.8% -9.9% -5.4%
Equity ratio 79.0% 74.8% 74.5%
Balance sheet total, EUR thousand 18,627 18,241 -6.1% 18,324
Research and development, EUR 692 592 2,086
thousand
percentage of net sales 17.4% 15.0% 12.1%
Personnel on average during the 183 174 +5.2% 177
review period
Personnel at the end of the 184 177 +4.0% 189
review period
Number of shares at the end of 30,165,900 29,261,849 +3.1% 29,261,800
the review period****
Earnings per share (EUR)**** -0.0118 0.0004 -2,746.7% 0.0235
Shareholders' equity per share 0.434 0.420 +3.3% 0.441
(EUR)****
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* 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 profitability 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.
CEO Sami Ensio's review
During January 1-March 31, 2012, Innofactor's net sales grew by 0.7 percent
compared to the corresponding period last year. 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. The growth was
entirely organic.
The effect on net sales related to the starting of the organizational change
has been larger and has lasted longer than estimated beforehand. The
organizational change is necessary to secure Innofactor's competitiveness in
the long run and it is expected to improve Innofactor's competitiveness on the
second half of the year. For example, dividing the product development and
system integrator operations into their own units has already improved the
quality of product development.
There have not been any significant changes in the general market situation
compared to the last quarter of 2011.
The revenue development was also affected by research and product development
costs, which were larger than on an average quarter and partly unexpected. New
versions of two key products were delayed and therefore required more resources
that had been planned causing extra costs and delays in agreed version
installments, which hindered the growth of net sales. Research and development
costs recognized in the profit and loss statement in the review period were EUR
692 thousand (2011: EUR 592 thousand), which was 17.4% of the net sales (2011:
15.0%).
Operating profit before depreciation and amortization (EBITDA) in the review
period was EUR -209 thousand (-5.3%) and operating profit (EBIT) was EUR -347
thousand (-8.7%). In addition to the above-mentioned write-off of EUR 300
thousand in the net sales, the operating profit was affected by the personnel
and office space arrangements related to the organizational change, which led
to a one-off cost of about EUR 100 thousand. Innofactor's costs are mainly
personnel costs, which cannot be adapted in the short term to changes in the
net sales, so the challenges of developing the net sales have a significant
effect on the operating profit.
In order to improve the profitability, Innofactor's Board of Directors has made
a decision to start co-operation negotiations, which will concern the personnel
of Innofactor's SharePoint Solutions unit. 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 resources.
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, April 30, 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 for January 1-March 31, 2012
On April 30, 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. At the briefing, CEO Sami Ensio
will comment the achievements of Q1/2012 and the outlook for this year.
Innofactor will also hold a conference call in English for analysts, media and
investors on April 30, 2012, at 4:00 pm 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:
July 16-July 30, 2012: Silent period
July 31, 2012, at 8:30 Finnish time: Interim report for January-June
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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