Digia Oyj - Half Year financial report

Digia Plc Half Year Financial Report 2017: Net sales growth accelerates to 11 per cent in the second quarter

Digia Plc
Half Year Financial Report
11 August 2017 at 8:00

Digia Plc Half Year Financial Report 2017
Net sales growth accelerates to 11 per cent in the second quarter

April-June 2017
  * Net sales EUR 24.8 (22.4) million, increase 10.9%
  * Operating result EUR 1.4 (1.8) million, 5.5% (7.9%) of net sales
  * Earnings per share EUR 0.05 (0.07)

January-June 2017
  * Net sales EUR 47.4 (43.8) million, increase 8.0%
  * Operating result EUR 1.4 (2.7) million, 3.0% (6.2%) of net sales
  * Earnings per share EUR 0.05 (0.11)
  * Rights issue generates gross proceeds of about EUR 12.5 million
  * Digia's guidance for 2017 remains unchanged: Digia's net sales growth is
    expected to accelerate in 2017 (2016: net sales up 6.8%). Operating profit
    in 2017 is estimated to remain on a par with the previous year.

KEY FIGURES

+----------------------------+------+------+------+------+------+------+------+
|                            |  4-6/|  4-6/|Change|  1-6/|  1-6/|Change|      |
|EUR 1,000                   |  2017|  2016|     %|  2017|  2016|     %|  2016|
+----------------------------+------+------+------+------+------+------+------+
|Net sales                   |24,840|22,397| 10.9%|47,356|43,829|  8.0%|86,463|
+----------------------------+------+------+------+------+------+------+------+
|Operating result            | 1,374| 1,777|-22.7%| 1,441| 2,714|-46.9%| 5,419|
+----------------------------+------+------+------+------+------+------+------+
|- as a % of net sales       |  5.5%|  7.9%|      |  3.0%|  6.2%|      |  6.3%|
+----------------------------+------+------+------+------+------+------+------+
|Result for the period       | 1,050| 1,543|-32.0%|   961| 2,242|-57.1%| 4,064|
+----------------------------+------+------+------+------+------+------+------+
|- as a % of net sales       |  4.2%|  6.9%|      |  2.0%|  5.1%|      |  4.7%|
+----------------------------+------+------+------+------+------+------+------+
|                            |      |      |      |      |      |      |      |
+----------------------------+------+------+------+------+------+------+------+
|Return on equity, %         |      |      |      |  5.0%| 12.0%|      | 11.0%|
+----------------------------+------+------+------+------+------+------+------+
|Return on investment, %     |      |      |      |  5.5%| 13.1%|      | 11.0%|
+----------------------------+------+------+------+------+------+------+------+
|Interest-bearing liabilities|      |      |      |16,959|12,228| 38.7%|13,686|
+----------------------------+------+------+------+------+------+------+------+
|Cash and cash equivalents   |      |      |      |13,630| 1,752|678.0%| 1,994|
+----------------------------+------+------+------+------+------+------+------+
|Net gearing, %              |      |      |      |  7.5%| 33.9%|      | 35.6%|
+----------------------------+------+------+------+------+------+------+------+
|Equity ratio, %             |      |      |      | 52.3%| 50.6%|      | 49.8%|
+----------------------------+------+------+------+------+------+------+------+
|                            |      |      |      |      |      |      |      |
+----------------------------+------+------+------+------+------+------+------+
|Employees, end of period    |      |      |      |   973|   791| 23.1%|   872|
+----------------------------+------+------+------+------+------+------+------+
|Employees, average          |   960|   781| 22.9%|   928|   775| 19.7%|   810|
+----------------------------+------+------+------+------+------+------+------+
|Total shareholders' equity  |      |      |      |44,217|30,911| 43.0%|32,814|
+----------------------------+------+------+------+------+------+------+------+
|Balance sheet total         |      |      |      |84,830|61,586| 37.7%|66,390|
+----------------------------+------+------+------+------+------+------+------+
|Earnings per share          |  0.05|  0.07|-32.3%|  0.05|  0.11|-57.2%|  0.20|
+----------------------------+------+------+------+------+------+------+------+



DIGIA'S PRESIDENT AND CEO TIMO LEVORANTA COMMENTS ON THE SECOND QUARTER OF 2017

"The trend in Digia's net sales developed positively. Second-quarter net sales
saw year-on-year growth of 10.9 per cent. Growth was boosted by good demand for
e-commerce solutions and the acquisition of Omni Partners Oy, a digital services
company. The national Income Register project that Digia is implementing with
the Tax Administration also contributed to Digia's net sales growth. Outlays on
growth are in line with our strategy.

Digia's operating result was EUR 1.4 million and its EBIT% stood at 5.5 per
cent. Profitability was impacted by restructuring and acquisition of EUR 0.3
million as well as investments in growth and recruitment. Our operating result
was also impacted by several challenging projects and the investments they
required. However, their impact was clearly lower than in the first quarter.
June was a good month for both net sales and operating result.

In order to implement our growth strategy, we continued to recruit new experts
and also acquired Omni Partners to bolster our expertise in digital services,
especially with respect to tailored, open source-based online services as well
as service design. 52 people joined Digia as a result of the acquisition. Digia
employed 973 people at the end of June, which is 101 more employees than at the
end of 2016.

Our customers have a strong need to harness the opportunities afforded by
digitalisation in their businesses. We expect that the market will develop
favourably during 2017 in comparison to the previous year. Demand for software
as a service continues to become ever more commonplace. This model will reduce
the cyclicity of business operations and changes the structure and scheduling of
income flows, as a result of which one-off licence fees will account for a
smaller relative share and income will accumulate over a longer period.

Digia has a strong offering to support the digitalisation of our customers'
business operations. We work every day to earn our position as a visionary
partner to our customers in the development of their business operations. Our
strength is our Digia team, which consists of expert and constantly developing
professionals. We offer solutions for service design and development, as well as
for integration and back-end systems. Customers reap the benefits of
digitalisation only when the service package has been seamlessly integrated all
the way into their back-end systems.

We are continually strengthening our offering and working with our customers to
develop their businesses. One of the emerging customer needs is preparing for
the requirements of the revised General Data Protection Regulation (GDPR). We
have developed our offering to meet this customer need as well.

During 2017, we will continue to develop our competence structure. Our goal is
to strengthen the company's position, particularly in the growing markets for
digital services, process digitalisation and the service business, as well as to
accelerate the growth of net sales and boost efficiency to improve the
profitability of our operations."

BRIEFING INVITATION

Digia will hold a briefing for analysts on Friday 11 August 2017 at 11 am, in
the Freda cabinet at Hotel Scandic Simonkenttä, Simonkatu 9, 00100 Helsinki,
Finland. Welcome.

The material and presentation for the event will be available from about 11 am
on 11 August 2017 in the Investors section of the company's website:
www.digia.com/en/investors/reports-and-presentations.

FURTHER INFORMATION

President & CEO Timo Levoranta, tel. (exchange) +358 (0)10 313 3000

DISTRIBUTION

Nasdaq Helsinki
Key media
www.digia.com

Digia is a profitably growing IT service company that helps its customers
harness digital opportunities. As a visionary partner, Digia develops and
innovates solutions that support business operations together with its
customers. We adapt our expertise to their specific industries to help them
develop digital services, manage operations and utilise information. We operate
in Finland and Sweden with our team of nearly 1,000 experts. We are expanding
our international presence together with our customers. Digia's net sales in
2016 totalled EUR 86.5 million. The company is listed on NASDAQ Helsinki
(DIGIA).  www.digia.com



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Attachments:

Digia Plc Half Year Financial Report 2017.pdf