Finance and Ownership

CEO's review

I founded Innofactor 25 years ago, and the journey from a one-person business to a leading Microsoft solutions provider in the Nordics has been full of growth and learning. In our anniversary year 2025, we're moving ahead with a renewed strategy that emphasizes AI, Nordic expertise, and customer focus. We've reorganized our offering into four areas – Platforms, Solutions, Code, and Dynasty – and are supporting customers in adopting AI, especially through process-oriented AI agents. We're also building AI capabilities into our own products, particularly Dynasty.

Our strategy centers on Microsoft technologies, and our strong partnership has earned us key recognitions and supports customer value. We maintained personnel levels despite market challenges, and I'm proud of our team's drive to improve and innovate. Sustainability remains a key focus. This year is also bittersweet, as our 14-year journey as a listed company will likely end. While not an easy decision, I believe delisting is the right step forward. Thank you to everyone who has been part of our story.

Sami Ensio
Innofactor's founder, major owner, and CEO

Business Environment

We expect modest growth in the Nordic IT services market in 2025. However, due to the geopolitical situation and overall economic uncertainty, we are unable to provide a more precise estimate. Price competition remained intense in 2024, especially in the public sector, keeping the average prices of new contracts low. We anticipate a gradual increase in these prices in 2025. Our outlook is based on research institute forecasts and our own market insights.

Interest in generative AI continues to grow, offering significant opportunities for our customers and Innofactor, particularly in operational efficiency and new business models. While many AI projects are still in the experimental phase, we expect increased development in agent-based solutions during 2025. We are investing in enhancing AI capabilities in our own products, especially Dynasty. Additionally, factors such as climate change, shifting geopolitics, and nearshoring may support our strategy of relying on Nordic specialists. We believe these trends, along with Microsoft's strong market position in AI, will help us grow our market share in the region.

Key Figures

	2024	2023	2022	2021	2020
Net sales, EUR thousand	77,576	80,263	71,130	66,364	66,164
Operating profit before depreciation and amortization (EBITDA), EUR thousand	6,338	9,101	7,808	10,111	7,164
percentage of net sales	8.2 %	11.3%	11.0%	15.2%	10.8%
Operating profit (EBIT), EUR thousand	3,386	5,835	4,751	6,519	2,501
percentage of net sales	4.4 %	7.3%	6.7%	9.8%	3.8%
Earnings before taxes, EUR thousand	2,940	5,174	4,178	5,730	2,050
percentage of net sales	3.8 %	6.4%	5.9%	8.6%	3.1%
Earnings, EUR thousand	263	3,438	3,320	4,504	1,761
percentage of net sales	0.3 %	4.3%	4.7%	6.8%	2.7%
Shareholders' equity, EUR thousand	23,195	25,483	24,799	25,404	23,444
Interest bearing liabilities, EUR thousand	4,342	6,325	14,349	9,818	15,386
Cash and cash equivalents, EUR thousand	1,502	425	1,956	1,963	3,066
Deferred tax assets, EUR thousand	293	2,415	4,090	4,830	6,413
Return on equity	1.1 %	13.7%	13.2%	18.4%	7.7%
Return on investment	11.6 %	18.0%	14.5%	20.6%	11.1%
Net Gearing	30.1 %	36.1%	50.0%	30.9%	52.5%
Equity ratio	46.8 %	48.3%	44.8%	51.1 %	42.2%
Balance sheet total, EUR thousand	50,703	54,451	55,815	51,057	56,607
Research and development, EUR thousand	5,558	5,108	4,153	3,504	3,618
percentage of net sales	7.2 %	6.4%	5.8%	5.3%	5.5%
Personnel on average during the year	571	578	536	516	544
Personnel at the end of the year	546	581	564	500	541