2017-05-03 08:00:01 CEST
2017-05-03 08:00:01 CEST
REGULATED INFORMATION
Innofactor Oyj - Interim report (Q1 and Q3)
Innofactor Plc's Interim Report for January 1–March 31, 2017 (IFRS)
Innofactor Plc's Interim Report May 3, 2017, at 9:00 Finnish time
The best first quarter in history in terms of net sales and operating margin
January–March 2017 in brief:
-- The net sales were approximately EUR 17.5 million (2016: 14.6), which shows
an increase of 20.0%.
-- The operating margin was approximately EUR 1.2 million (2016: 0.9), which
shows an increase of 27.1%.
-- The operating profit was EUR 487 thousand (2016: 306), increasing by 59.2%;
the operating profit was affected by increased write-offs related to
acquisitions, in accordance with IFRS 3, resulting in a decrease of EUR 507
thousand (2016: 455).
-- The actions for improving effectiveness of operations, related to the
Lumagate companies, have had the desired effect of improving net sales,
operating margin and cash flow as of March 2017, even though the actions
resulted in extra costs for March.
-- Innofactor received several significant orders during the first quarter of
the year and in April. For example, the Unemployment Insurance Fund (TVR)
for approximately EUR 1.0 million, the Hospital District of Helsinki and
Uusimaa (HUS) for approximately EUR 1.8 million, and IF Metall (in Sweden)
for approximately EUR 0.6-4 million.
Jan 1–Mar Jan 1–Mar Change Jan 1–Dec
31, 2017 31, 2016 31, 2016
--------------------------------------------------------------------------------
Net sales, EUR thousand 17,517 14,597 20.0% 59,616
Operating margin (EBITDA), EUR 1,163 915 27.1% 4,831
thousand
percentage of net sales 6.6% 6.3% 8.1%
Operating profit/loss (EBIT), EUR 487 306 59.2% 2,332
thousand*
percentage of net sales* 2.8% 2.1% 3.9%
Earnings before taxes, EUR 346 171 102.3% 1,920
thousand*
percentage of net sales* 2.0% 1.2% 3.2%
Earnings, EUR thousand* 78 142 97.9% 1,516
percentage of net sales* 0.4% 1.0% 2.5%
Net gearing 52.9% 49.6% 70.2%
Equity ratio 43.2% 50.5% 35.9%
Active personnel on average 596 500 19.2% 427
during the review period**
Earnings per share (EUR) 0.0085 0.0041 104.3% 0.0467
*) In accordance with IFRS 3, the operating profit for January 1–March 31,
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 January 1–March 31, 2017, would have been EUR
994 thousand (2016: 761), the operative business result before taxes EUR 853
thousand (2016: 626), the operative business result EUR 682 thousand (2016:
501), and the operative business result per share EUR 0.0208 (2016: 0.0155).
**) 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: Strong start for 2017
In the first quarter of 2017, Innofactor continued profitable growth in
accordance with its strategy and had the best first quarter in its history, as
measured in both net sales and operating margin.
The net sales grew by 20.0 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 first quarter of 2017, the operating margin (EBITDA) was EUR 1.2 million
(6.6 percent of the net sales) and grew by 27.1 percent from the previous year.
In Innofactor’s history, the end of the year has typically been better in terms
of operating margin than the beginning of the year.
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 had
the desired effect of improving net sales, operating margin and cash flow as of
March 2017, even though the actions resulted extra costs for March.
The integration of the Swedish company Cinteros AB, acquired at the end of
2015, and the Lumagate companies, acquired in October 2016, is progressing as
planned. During 2017, we will continue to standardize our Nordic offering. The
Lumagate product business has been merged into the Innofactor's Nordic product
unit and our common offering.
Innofactor got significant deals during the first quarter and in April.
Innofactor's order book grew, for example, due to the following: delivering IT
services to the Unemployment Insurance Fund (TVR) for approximately EUR 1.0
million, developing the Terveyskylä applications for the Virtual Hospital
project to the Hospital District of Helsinki and Uusimaa (HUS) for
approximately EUR 1.8 million, and the further development and support for the
IF Metall's membership management system (in Sweden) for approximately EUR
0.6-4 million.
Also the cash flow from business activities in the first quarter remained
strong and was EUR 2.3 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 approximately 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:
-- The best Nordic professionals in the Microsoft ecosystem
-- The leading offering in cloud solutions and digitalization
-- A proactive, value-adding and flexible delivery model
-- Spearhead customers in selected fields in the Nordic Countries
Innofactor's long-term financial goal is to grow profitably:
-- By achieving annual organic growth of approximately 20 percent in 2020 at
the latest
-- By achieving approximately 20 percent operating margin (EBITDA) in relation
to the net sales in 2020 at the latest
-- By keeping the cash flow positive and securing solid financial standing in
all situations
Innofactor's net sales on the review period of January 1–March 31, 2017, grew
by 20.0% and was mostly based on inorganic growth resulting from the Lumagate
acquisition.
Innofactor's operating margin (EBITDA) in relation to net sales was 6.6 percent
in the review period of January 1–March 31, 2017. Typically, Innofactor’s
profitability has improved towards the end of the year.
Innofactor’s operating cash flow in the review period of January 1–March 31,
2017, was EUR 2.3 million positive (2016: EUR 3.5 million). Innofactor’s
financial stability is good. Net gearing at the end of the review period was
52.9 percent (2016: 49.6 percent).
Espoo, May 3, 2017
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 January 1–March 31, 2017
On May 3, 2017, at 10:00 Finnish time, Innofactor will hold a briefing
concerning the interim 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. 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 by sending email to
tanja.eskolin@innofactor.com.
Innofactor will also hold a conference call in English for analysts, media and
investors on May 3, 2017, at 16:00 Finnish time. Registrations to
tanja.eskolin@innofactor.com before 12:00 Finnish time on Wednesday, May 3,
2017.
Distribution:
NASDAQ Helsinki
Main media
www.innofactor.com
Innofactor
Innofactor is a leading Nordic provider of digitalization and cloud solutions.
Innofactor has Microsoft Ecosystem’s leading expertise and the most
comprehensive offering in the Nordics. Innofactor has over 600 eager and
motivated top professionals in Finland, Sweden, Denmark and Norway. Innofactor
serves over 1,500 commercial, public, and third sector organizations. In 2012
to 2016, the annual growth of Innofactor’s net sales has been approximately
28%. The Innofactor Plc share is listed in the technology section of the main
list of NASDAQ Helsinki Ltd. www.innofactor.com
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