2017-03-07 07:30:01 CET
2017-03-07 07:30:01 CET
REGULATED INFORMATION
Innofactor Oyj - Financial Statement Release
Innofactor Plc Financial Statement 2016 (IFRS)
Innofactor Plc Financial Statement March 7, 2017, at 8:30 Finnish time.
Innofactor closes 2016 with a strong quarter – The maximum purchase price of
the Lumagate acquisition reduced by EUR 3.7 million as Lumagate operating
margin was weaker than forecasted
Quarter 10–12/2016:
-- The net sales were approximately EUR 18.0 million, which shows an increase
of 42.9%.
-- The operating margin was approximately EUR 2.0 million (11.1% of the net
sales), which shows an increase of 14.2%.
-- The operating profit was approximately EUR 1.3 million (2015: approximately
EUR 1.5 million), decreasing by 9.8% as the net sales were affected by
increased write-offs related to acquisitions, in accordance with IFRS 3,
resulting in a decrease of EUR 518 thousand (2015: 120).
Year 1–12/2016:
-- The net sales were approximately EUR 59.6 million, which shows an increase
of 34.1%.
-- The operating margin was approximately EUR 4.8 million (8.1% of the net
sales), which shows an increase of 30.4%.
-- The operating profit was approximately EUR 2.3 million (2015: approximately
EUR 2.5 million), decreasing by 8.3% as the net sales were affected by
increased write-offs related to acquisitions, in accordance with IFRS 3,
resulting in a decrease of EUR 1,884 thousand (2015: 480).
-- Innofactor’s operating cash flow in the review period remained strong and
was approximately EUR 3.1 million.
Oct Oct 1–Dec Change Jan Jan Change
1–Dec 31, 2015* 1–Dec 1–Dec
31, 2016 31, 2016 31,
2015*
--------------------------------------------------------------------------------
Net sales, EUR thousand 17,992 12,590 42.9% 59,616 44,452 34.1%
Operating margin 1,990 1,742 14.2% 4,831 3,705 30.4%
(EBITDA), EUR thousand
percentage of net sales 11.1% 13.8% 8.1% 8.3%
Operating profit/loss 1,326 1,470 -9.8% 2,332 2,542 -8.3%
(EBIT), EUR thousand**
percentage of net 7.4% 11.7% 3.9% 5.7%
sales**
Earnings before taxes, 1,196 1,395 -14.3% 1,920 1,935 -0.8%
EUR thousand**
percentage of net 6.6% 11.1% 3.2% 4.4%
sales**
Earnings, EUR 957 1,116 -14.2% 1,536 1,548 -0.8%
thousand**
percentage of net 5.3% 8.9% 2.6% 3.5%
sales**
Net gearing 70.2% 34.1% 70.2% 34.1%
Equity ratio 35.8% 56.9% 35.8% 56.9%
Active personnel on 589 416 41.6% 532 409 30.1%
average during the
review period***
Earnings per share 0.0292 0.0334 -12.5% 0.0467 0.0475 -1.6%
(EUR)
*) During the third quarter of 2015, an error in the assessment of projects was
detected in the Group company concerning the period of January 1–June 30, 2015,
for the year 2015 as well as previous financial periods. The assessment error
was corrected for the above-mentioned periods in accordance with IAS 8: 41–42.
The total effect of the error was a decrease of approximately EUR 552 thousand
in the operating margin. Of this, approximately EUR 238 thousand was for the
year 2015. Adjustments and their effects on the Group figures are described in
more detail in the attachment to the interim report for January 1–September 30,
2015, which was published on October 20, 2015.
**) In accordance with IFRS 3, the operating profit for October 1–December 31,
2016, includes EUR 518 thousand (2015: 120) 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 October 1–December 31, 2016, would have been
EUR 1,844 thousand (2015: 1,590), the operative business result before taxes
EUR 1,714 thousand (2015: 1,515), the operative business result EUR 1,371
thousand (2015: 1,212), and the operative business result per share EUR 0.0419
(2015: 0.0375). The business result of the review period January 1–December 31,
2016, includes EUR 1,884 thousand (2015: 480) 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–December 31, 2016, would have been
EUR 4,216 thousand (2015: 3,022), the operative business result before taxes
EUR 3,804 thousand (2015: 1,935), the operative business result EUR 3,043
thousand (2015: 1,548), and the operative business result per share EUR 0.0926
(2015: 0.0471).
***) 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
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 2016, we became the number one provider of
Microsoft-based solutions in the Nordic Countries. Also, Q4/2016 net sales and
operating margin were the highest in our history.
In the last quarter of 2016, Innofactor continued profitable growth in
accordance with its strategy and had the best quarter in its history, as
measured in both net sales and operating margin. The growth of net sales in the
last quarter of 2016 was 42.9 percent (net sales EUR 18.0 million) and
operating margin (EBITDA) was EUR 2.0 million (11.1 percent of the net sales),
which shows an increase of 14.2 percent since the previous year.
In the entire year 2016, Innofactor’s net sales grew 34.1 percent (net sales
approximately EUR 59.6 million). The operating margin (EBITDA) was
approximately EUR 4.8 million, which shows an increase of 30.4 percent since
last year. The cash flow from business activities in 2016 remained strong and
was approximately EUR 3.1 million.
On October 9, 2016, Innofactor reached an agreement on acquiring the entire
share capital of the Lumagate group from the company’s key persons. Lumagate is
one of the leading Nordic IT companies, which operates in the Microsoft
ecosystem and focuses on offering cloud-based solutions. The company has over
70 employees in three different countries: Sweden, Norway and Denmark. Due to
the acquisition, Innofactor expanded into Norway and strengthened its position
significantly in Sweden and Denmark. Innofactor considered that, after the
acquisition, it had reached the position of the number one Microsoft-based
solution provider in the Nordic Countries, as defined in its strategy.
Innofactor's vision from now on is to be the leading implementer of cloud
solutions and digitalization in each of the Nordic Countries.
However, in 2016, Lumagate's net sales, operating margin and cash flow in the
last quarter were significantly weaker than the estimates at the time of
signing the deal. Unfortunately, this also has a negative impact on
Innofactor's figures for 2016. Corrective actions to improve the situation were
started immediately after the problems were noticed and the organization in
Norway went through a major reforming in February 2017. Lumagate Sweden’s
organization will be renewed during March 2017 and Lumagate Denmark will be
merged with Innofactor in Demark in April 2017. In addition Lumagate group
functions will be combined with Innofactor. These actions are expected to
improve the net sales, operating margin and cash flow starting from the second
quarter of 2017 at the latest.
As the Lumagate's operating margin was significantly smaller than estimated in
2016, the maximum purchase price of Lumagate changed and is now approximately
EUR 6.8 million, whereas it was EUR 10.5 million previously. This means that
the possible additional purchase price is EUR 2.1 million at the maximum and,
should it realize, will be paid only in 2019 (with the company shares as a
default). Despite the decrease in Lumagate net sales and operating profit in
2016, we consider the result, due to the lowered maximum purchase price of EUR
3.7 million, to positively affect Innofactor's value to shareholders.
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:
-- 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:
-- To achieve annual organic growth of approximately 20 percent in 2020 at the
latest
-- To achieve approximately 20 percent operating margin (EBITDA) in relation
to the net sales in 2020 at the latest
-- To keep the cash flow positive and to secure solid financial standing in
all situations
We believe that we can achieve the 20% organic growth by following means:
-- In the Nordic Countries, we will focus on those fields and customer
segments, which have great growth potential in digitalization and
implementing cloud services. Social services and healthcare along with
wellbeing services are an example of a field in which we will focus
strongly in 2017 and coming years.
-- We will improve sales of our products and services to existing customers in
order to compete for an increasing share of the budget the customers are
using for digitalization and to develop customer relationships in long
term.
-- We will invest in using modern digital marketing methods to improve
acquiring of new customers and to strengthen the customers' image of
Innofactor as the leading Nordic implementer of digitalization and cloud
services, as well as to improve our sales.
In addition to what was presented above, we believe that we can achieve the 20%
operating margin by following means:
-- We will move the focus in our offering more and more to our own products
and productized services, which ease our customers' transfer to cloud
services and maintenance. Thus, we can continue to offer our customers
better services and greater added value, while strengthening long-term
customer relationships.
-- We will improve the skills of our own specialists, so that our customers
will see significant added value in their know-how as compared to our
competitors and will be willing to pay a rate that is higher than the
field's average.
-- We will develop our flexible delivery model, which enables fast added
value, in such a way that it will further improve customer satisfaction. In
the development of our delivery model, we will focus on as efficient
planning of the work as possible, while minimizing unnecessary work that
will not provide added value to the customer. At the same time, our
invoicing rate will improve.
-- In the Nordic level, we will focus on gaining synergies that provide cost
savings, for example, by implementing in 2017–2018 the cloud-based Nordic
Microsoft Dynamics 365 for Operations ERP system.
Innofactor's net sales on the review period of January 1–December 31, 2016,
grew by 34.1% and a significant part of this was based on inorganic growth
resulting from acquisitions. Innofactor's operating margin (EBITDA) in relation
to net sales was 8.1 percent in the review period of January 1–December 31,
2016. Innofactor’s operating cash flow in the review period of January
1–December 31, 2016, was EUR 3.1 million positive (2015: EUR 3.9 million).
Innofactor’s financial stability remains to be good. Net gearing at the end of
the review period was 70.2 percent (2015: 34.1 percent). During the review
period, Innofactor redeemed the EUR 3.2 million hybrid bond, which decreased
the equity ratio and increased the net gearing. During the review period, the
company took loans for approximately EUR 4.1 million for the acquisition of
Cinteros AB and EUR 5.0 million for the acquisition of Lumagate, which together
increased the amount of interest bearing liabilities.
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 margin (EBITDA) that exceeds 10%, the maximum
dividend allowed by the state of the business. For 2016, the operating margin
(EBITDA) was 8.1% of the net sales. 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 2016, the distributable assets of the
Group's parent company were EUR 41,020,610.27.
The Board of Directors proposes that no dividend be distributed for the
financial period of 2016.
Espoo, March 7, 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 financial statement of 2016
On March 7, 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 and CFO Patrik Pehrsson. 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 March 7, 2017, at 16:00 Finnish time. Registrations to
tanja.eskolin@innofactor.com before 12:00 Finnish time on Tuesday, March 7,
2017.
Financial releases in 2016
The annual report for 2016 will be published on the company's web site on
Tuesday, March 14, 2017.
The Annual General Meeting will be held on Tuesday, April 4, 2017, at 9:00
Finnish time.
The schedule for financial releases in 2016 is as follows:
-- Interim Report January−March 2017 (Q1) on Wednesday, May 3, 2017
-- Half-Yearly Report January−June 2017 (Q2) on Tuesday, August 1, 2017
-- Interim Report January−September 2017 (Q3) on Tuesday, October 31, 2017
Distribution:
NASDAQ Helsinki
Main media
www.innofactor.com
© 2024 Nasdaq, Inc. All Rights Reserved |