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2017-08-01 08:00:02 CEST 2017-08-01 08:00:02 CEST REGULATED INFORMATION Innofactor Oyj - Half Year financial reportInnofactor Plc's Half-Yearly Report, January 1–June 30, 2017 (IFRS)Innofactor Plc Half-Yearly Report, August 1, 2017, at 9:00 Finnish time The first half of the year was passable—we expect to have a strong second half of the year January–June 2017 in brief:
April–June 2017 in brief:
*) In accordance with IFRS 3, the operating profit for April 1–June 30, 2017, includes EUR 507 thousand (2016: 455) in depreciations related to acquisitions, consisting of allocations of the purchase price to intangible assets. Adjusted for the said depreciations, Innofactor’s operative business profit for the review period of April 1–June 30, 2017, would have been EUR 707 thousand (2016: 901), the operative business result before taxes EUR 579 thousand (2016: 851), the operative business result EUR 463 thousand (2016: 681), and the operative business result per share EUR 0.0141 (2016: 0.0211). In accordance with IFRS 3, the operating profit for January 1–June 30, 2017, includes EUR 1,014 thousand (2016: 910) in depreciations related to acquisitions, consisting of allocations of the purchase price to intangible assets. Adjusted for the said depreciations, Innofactor’s operative business profit for the review period of January 1–June 30, 2017, would have been EUR 1,701 thousand (2016: 1,662), the operative business result before taxes EUR 1,432 thousand (2016: 1,447), the operative business result EUR 1,146 thousand (2016: 1,182), and the operative business result per share EUR 0.0347 (2016: 0.0367). **) The Innofactor Group monitors the number of active personnel. The number of active personnel does not include employees who are on a leave of over 3 months. Innofactor’s future outlook for 2017 remains the same Innofactor’s net sales and operating margin (EBITDA) in 2017 is estimated to increase from 2016, during which the net sales were EUR 59.6 million and operating margin was EUR 4.8 million. CEO Sami Ensio's review: In the second half of the year, Innofactor will focus in clearly improving the profitability The growth of the net sales in the second quarter was 14.6 percent (net sales EUR 17.5 million). Innofactor has estimated that the Nordic IT market will grow faster in 2017 than in the previous years, and this estimate remains the same. The market growth is believed to also increase Innofactor’s growth possibilities. In the second quarter of 2017, the operating margin (EBITDA) was EUR 0.9 million (5.0 percent of the net sales) and decreased 18.5 percent from the previous year. The weaker than expected profitability was contributed to by the lower than expected net sales and the fact that the results from the Danish business operations were significantly less than expected. The actions for improving effectiveness of operations (stated in the financial statement on March 7, 2017, and related to the Lumagate companies), including renewal of the organization structure and trimming down management, have continued to improve the net sales, especially in Norway. In Innofactor’s history, the end of the year has typically been better in terms of operating margin than the beginning of the year, but special attention still needs to be paid to improving the profitability and raising it to the goal level. In its meeting yesterday, July 31, 2017, Innofactor's Board of Directors decided that the new director of Nordic public administration business, Per Bendix Olsen from Denmark, will also act as the Country Manager in Denmark as of August 1, 2017, until further notice. Per Bendix has an extensive experience on managerial positions in IT companies, especially in Microsoft, where his latest job was managing international public administration partnerships at the Microsoft's head office at Redmond. Also another person coming from the Microsoft's head office, Vesa Syrjäkari, will start in the Innofactor's Executive Board on September 1, 2017. His title will be Executive Vice President, Business Development and Operational Excellence. Vesa has been one of the highest-ranking Finns ever in the Microsoft's international organization. His last job there was to be responsible globally for the effectiveness of Microsoft's sales to its major customers. Vesa's first job in Innofactor is to focus on improving profitability and to ensure that the already made plans for improving effectiveness in business units are implemented successfully. Despite the challenging operating margin level, the cash flow from business activities in the first half of the year remained strong and was approximately EUR 3.9 million (2016: EUR 2.9 million). Innofactor is still actively looking for new strategic partnerships in the Nordic Countries. The Group’s goal is to grow both organically and through acquisitions. Strategy and its realization in the review period Innofactor is the one of the leading implementers of cloud solutions and digitalization in the Nordic Countries. Innofactor has the widest solution offering and leading know-how in the Microsoft ecosystem in the Nordic Countries. Innofactor has over 600 enthusiastic and motivated top specialists in Finland, Sweden, Denmark and Norway. Innofactor's customers include over 1,500 companies and public administration and third sector organizations. During the years 2017-2020, Innofactor will primarily strive to unify its offering in the Nordic Countries in its selected areas. This may happen either through organic growth or selected acquisitions. Innofactor's mission: We empower organizations and people to make a difference in the digital world. Innofactor's vision: We are the leading implementer of cloud solutions and digitalization in each of the Nordic Countries (Finland, Sweden, Denmark and Norway). Innofactor's strategy for achieving this vision includes:
Innofactor's long-term financial goal is to grow profitably:
Innofactor's net sales in the review period of January 1–June 30, 2017, grew by 17.3% and the main part of this was based on inorganic growth resulting from the Lumagate acquisition. Innofactor's operating margin (EBITDA) in relation to net sales was 5.8 percent in the review period. Typically, Innofactor’s profitability has improved towards the end of the year. Innofactor’s operating cash flow in the review period of January 1–June 30, 2017, was EUR 3.9 million positive (2016: EUR 2.9 million). Innofactor’s financial stability is good. Net gearing at the end of the review period was 48.9 percent (2016: 52.2 percent).
Additional information: Briefings concerning the Half-Yearly Report January 1–June 30, 2017 On August 1, 2017, at 10:00 Finnish time, Innofactor will hold a briefing concerning the Half-Yearly Report 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. Innofactor will also hold a corresponding conference call in English on August 1, 2017, at 16:00 Finnish time. We ask you to register for the briefings beforehand by sending email to ir@innofactor.com.
The presentations of the briefings will be available on Innofactor's web site after the briefings.
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