Innofactor Oyj - Financial Statement Release

Innofactor Plc Financial Statement 2011 (IFRS)

Innofactor Plc Financial Statement Release February 28, 2012, at 8:30 Finnish
time 


Summary

Innofactor group's key figures for October 1-December 31, 2011:

  -- Net sales EUR 5,136 thousand (2010:  3,312), increase of 55.1%
  -- Operating profit before depreciation and amortization (EBITDA), EUR 606
     thousand (2010: 460), increase of 31.7%
  -- EBITDA percentage 11.8% (2010: 13.9%)
  -- Operating profit (EBIT) EUR 463 thousand (2010:  391), increase of 18.4%
  -- EBIT percentage 9.0% (2010: 11.8%) 

Innofactor group's key figures for January 1-December 31, 2011:

  -- Net sales EUR 17,205 thousand (2010: 9,862), increase of 74.5%
  -- Operating profit before depreciation and amortization (EBITDA), EUR 1,443*
     thousand (2010: 980), increase of 47.2%
  -- EBITDA percentage 8.4%* (2010: 9.9%)
  -- Operating profit (EBIT) EUR 904* thousand (2010: 702), increase of 28.8%
  -- EBIT percentage 5.3%* (2010: 7.1%)

* The figures include one-off costs related to the relisting and the
consolidation of shares for about EUR 300 thousand. 

There are notable uncertainties related to the outlook for 2012 due to the
instability of the global financial situation, so no detailed forecasts for
2012 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 financial statement have been audited.
Key figures of the group, IFRS



        mo. 10-12   mo. 10-12   Change  mo. 1-12    mo. 1-12    Change  mo.
1-12 
         /2011       /2010               /2011       /2010               /2009 
--------------------------------------------------------------------------------
-- 
--------------------------------------------------------------------------------
-- 
Net          5,136       3,312  +55.1%      17,205       9,862  +74.5%      
6,920 
 sales 
, EUR 
 thous 
and 
Operat         606         460  +31.7%       1,443         980  +47.2%      
1,309 
ing 
 profi 
t 
 befor 
e 
 depre 
ciatio 
n and 
 amort 
izatio 
n 
 (EBIT 
DA), 
 EUR 
 thous 
and* 
percen       11.8%       13.9%                8.4%        9.9%              
18.9% 
tage 
 of 
 net 
 sales 
* 
Operat         463         391  +18.4%         904         702  +28.8%      
1,165 
ing 
 profi 
t 
 (EBIT 
), EUR 
 thous 
and* 
percen        9.0%       11.8%                5.3%        7.1%              
16.8% 
tage 
 of 
 net 
 sales 
* 
Earnin         457         387  +18.1%         886         696  +27.3%      
1,182 
gs 
 befor 
e 
 taxes 
, EUR 
 thous 
and* 
percen        8.9%       11.7%                5.1%        7.1%              
17.1% 
tage 
 of 
 net 
 sales 
* 
Earnin         361         281  +28.5%         687         505  +32.5%        
875 
gs, 
 EUR 
 thous 
and* 
percen        7.0%        8.5%                4.0%        5.1%              
12.6% 
tage 
 of 
 net 
 sales 
* 
Equity      12,905      12,218  +5.6%       12,905      12,218  +5.6%       
2,597 
, EUR 
 thous 
and 
Return        2.8%        3.9%                5.5%        6.8%              
40.5% 
 on 
 equit 
y** 
Return        3.7%        5.7%                7.2%        9.7%              
54.9% 
 on 
 inves 
tment* 
* 
Net          -5.4%      -14.0%               -5.4%      -14.0%             
-63.5% 
 geari 
ng 
Equity       74.5%       68.2%               74.5%       68.2%              
56.1% 
 ratio 
Balanc      18,324      19,517   -6.1%      18,324      19,517   -6.1%      
5,355 
e 
 sheet 
 total 
, EUR 
 thous 
and 
Resear         369                           2,086       1,173  +77.8%        
680 
ch and 
 devel 
opment 
, EUR 
 thous 
and*** 
percen        7.2%                           12.1%       11.9%               
9.8% 
tage 
 of 
 net 
 sales 
*** 
Person         184         133  +38.3%         177         108  +63.9%         
66 
nel on 
 avera 
ge 
 durin 
g the 
 revie 
w 
 perio 
d 
Person         189         171  +10.5%         189         171  +10.5%         
89 
nel at 
 the 
 end 
 of 
 the 
 revie 
w 
 perio 
d 
Number  29,261,800  29,261,849   -0.0%  29,261,800  29,261,849   -0.0% 
16,756,659 
 of 
 share 
s at 
 the 
 end 
 of 
 the 
 revie 
w 
 perio 
d**** 
Earnin      0.0123      0.0121  +1.1%       0.0235      0.0274  -14.2%      
0.054 
gs per 
 share 
 (EUR) 
**** 
Shareh       0.441       0.418  +5.5%        0.441       0.418  +5.5%        
0.15 
olders 
' 
 equit 
y per 
 share 
 (EUR) 
**** 

* The figures include one-off costs related to the relisting and the
combination of shares to the amount of about EUR 200 thousand during January
1-March 31, 2011, and to the amount of about EUR 100 thousand during April
1-June 30, 2011. 

** The percentages for the return on equity and return on investment have been
adjusted to correspond with the figures for a 12-month period. 

*** There are no comparison data for the corresponding review period in 2010 as
Innofactor did not draft comparable interim reports in 2010 due to the reverse
acquisition in accordance with IFRS 3. 

**** The number of shares before December 27, 2010, presented in the table has
been calculated from the number of Innofactor Oy shares due to the reverse
acquisition in accordance with IFRS 3. 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

In 2011, Innofactor's net sales grew by 74.5 percent from the corresponding
period last year. Organic growth was about 21.4 percent and inorganic growth
about 53.1 percent. 

In 2011, the research and development focused on new versions of old products
and on Innofactor's first cloud solutions. Research and development costs
recognized in the profit and loss statement were EUR 2,086 thousand (2010: EUR
1,173 thousand and 2009: EUR 680 thousand), showing growth of 77.8 percent. 

Operating profit before depreciation and amortization (EBITDA) in 2011 were EUR
1,443 thousand (8.4%) and operating profit (EBIT) were EUR 904 thousand (5.3%).
In 2011, special attention was paid to improving profitability, which was
improved during the year (EBITDA Q1: 3.8%, Q2: 6.3%, Q3: 10.9% and Q4: 11.8%,
but it should be noted that also in previous years, Innofactor's operations
have typically been more profitable at the end of the year). 

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

Due to the instability of the general financial situation, it is impossible to
make reliable estimates on the development of the IT markets. During the
previous recession, the IT markets did not react as strongly to the change in
the market situation as other sectors did, so in a possible new recession, the
effects probably should not be too dramatic, but it is difficult to present any
figures. 

A clear change is taking place in the IT markets. One of the central trends is
the consumerization of information technology, leading to a situation where
more and more of companies' information technology purchases are based on the
conditions of consumer markets. Corporate customers aim to deploy software that
can be used phones, tablets and personal computers. Another central trend
consists of the new environments offered by cloud computing and the
possibilities of offering software from a cloud to a wide user base and for all
terminals, including phones. The company believes that Microsoft is well
positioned for this change because its leading position in business
applications and strong investment in mobile devices. 

The company believes that, in the long term, this development will enable
further growth for companies like Innofactor, which have a strong commitment
with Microsoft, in both the traditional system integrator business locally and
in delivering cloud and mobile applications globally. The company believes that
strong commitment with Microsoft will bring companies a significant competitive
edge. Companies that have a strong focus in Microsoft solutions are primarily
relatively small, so Innofactor believes that it is probable that the market
will consolidate through mergers and acquisitions, which offers Innofactor
possibilities to grow inorganically. 

In June 2011, Innofactor was awarded as the Microsoft Country Partner of the
Year in Finland, which reinforced the company's position as one of Microsoft's
key partners in Finland. This has also given the company positive publicity
outside of Finland, especially in the Microsoft's organization. On July 10,
2011, Innofactor launched its new cloud services at the Microsoft Worldwide
Partner Conference in Los Angeles, USA. In November 2011, the Finnish Software
Entrepreneurs Association selected Sami Ensio, the founder and CEO of
Innofactor, as the Software Entrepreneur of the Year, which has also provided
positive publicity. 

Future outlook

There are notable uncertainties related to the outlook for 2012 due to the
instability of the global financial situation, so no detailed forecast for 2012
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. 

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 profit before depreciation and write-downs
(EBITDA) that exceeds 10 percent, the maximum dividend allowed by the state of
the business. For 2011, the EBITDA was under 10 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 2011, the distributable assets of the
group's parent company were EUR 28,535,337.36. 

The Board of Directors proposes that Innofactor Plc should not pay any dividend
for the financial period of 2011. 


Espoo, February 28, 2012

INNOFACTOR PLC

Board of Directors


Additional information:
CEO Sami Ensio, Innofactor Plc
Tel. +358 50 584 2029
sami.ensio@innofactor.com



Briefings on the Financial Review for 2011

Innofactor's President and CEO Sami Ensio will present the Financial Review for
2011 in a briefing in Finnish for analysts and media, on 28 February at 09:00
Finnish time (11:00 GMT) at Scandic Continental, Mannerheimintie 46, Helsinki.
Mr. Ensio will comment achievements 2011 and outlook for the current year. 

Innofactor's President and CEO Sami Ensio will present the Financial Review for
2011 in a web conference for analysts, media and investors, held in English
language, on 28 February at 16:00 Finnish time (14:00 GMT). Registration:
ir@innofactor.com 


Financial releases in 2012

The schedule for financial releases in 2012 is as follows:

Week 10/2012: Annual Report*

March 27, 2012, at 10:00 Finnish time: Annual General Meeting

April 16-April 29, 2012: Silent period

April 30, 2012, at 8:30 Finnish time: Interim report for January-March

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

December 31, 2012, at 8:30 Finnish time: Interim report for January-September

* Differing from what was stated previously, it has been decided that the
Annual Report for 2011 will be published on week 10/2012. 



Distribution:

NASDAQ OMX Helsinki
Main media
www.innofactor.com

Attachments:

Innofactor Plc Financial Statement 2011.pdf