Innofactor as an Investment

Innofactor Plc's half-yearly report for January 1–June 30, 2022 has been published on Thursday, July 21, 2022, at 9:00 am Finnish time: Innofactor's second quarter was challenging, but we, nevertheless, expect to achieve the guidance we have issued for 2022.

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The Leading Driver of the Modern Digital Organization in the Nordic Countries

Innofactor is the leading driver of the modern digital organization in the Nordic Countries for its over 1,000 customers in commercial, public and third sector. Innofactor has the widest solution offering and leading know-how in the Microsoft ecosystem in the Nordics. Innofactor has over 500 enthusiastic and motivated top specialists in Finland, Sweden, Denmark and Norway. The Innofactor Plc share is listed in the technology section of the main list of NASDAQ Helsinki Oy. #ModernDigitalOrganization #HybridWork #PeopleFirst #CreatingSmiles

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Innofactor Plc's half-yearly report for January 1–June 30, 2022: Innofactor's second quarter was challenging, but we, nevertheless, expect to achieve the guidance we have issued for 2022

 

April–June 2022 in brief:

  • Net sales were approximately EUR 16.9 million (2021: 17.3), representing a decrease of 2.0%
  • Operating margin was approximately EUR 1.4 million (2021: 2.1), representing a decrease of 34.3%
  • Operating profit was EUR 0.7 million (2021: 1.3), representing a decrease of 47.5%
  • The order backlog at the end of the review period was EUR 77.2 million (2021: 72.7), which shows an increase of 6.1%
  • Innofactor received several significant orders in the second quarter, for example:
    • Senate Properties’ case and document management system and related maintenance and further development services, approximately EUR 2.2 million
    • Delivery of managed cloud services that support a Danish pharmaceutical company’s data integration platform, approximately EUR 2.1 million, not yet entered into the order backlog at the end of the review period
    • IT expert services to support the development and maintenance of a Microsoft Dynamics 365 CRM system for the State Treasury of Finland, approximately EUR 5.0 million, not yet entered in the order backlog at the end of the review period
    • Maintenance and development of a grant and case management system for the Funding Centre for Social Welfare and Health Organisations (STEA), approximately EUR 1.8 million, not yet entered into the order backlog at the end of the review period
    • Case and document management system, as well as related maintenance and support services, for the Greater Stockholm Fire Brigade (Storstockholms brandförsvar), approximately EUR 0.35 million, not yet entered into the order backlog at the end of the review period
  • Innofactor acquired Invenco Ltd, a Finnish company specialized in data and analytics with approximately 50 employees and net sales of approximately EUR 6 million

January–June 2022 in brief:

  • Net sales were approximately EUR 33.9 million (2021: 35.1), representing a decrease of 3.4%
    • Without the Prime business sold in the first quarter of 2021, the comparable change would have been a decrease of 1.8 percent.
  • Operating margin was approximately EUR 3.4 million (2020: 6.8), representing a decrease of 49.4%
    • The operating margin in 2021 includes a capital gain of approximately EUR 2.6 million from the sale of the Prime business, without which the operating margin would have been approximately EUR 4.2 million; the comparable change in operating margin is a decrease of 18.5%
  • Operating profit was EUR 2.0 million (2021: 5.1), representing a decrease of 60.9%
    • The operating profit in 2021 includes a corresponding capital gain as the operating margin, without which the operating profit would have been approximately EUR 2.5 million; the comparable change in operating profit is a decrease of 21.3%

 

Q2 2022 result interviews

Innofactor's CEO Sami Ensio's result interviews by Evli Research's analyst Jerker Salokivi and Inderes' analyst Joni Grönqvist after Innofactor's Q2 2022 result.

Innofactor Q2 interview with CEO Sami Ensio - Evli (In English, 8 min)

Evli result interview

CEO's Review

July 21, 2022

Successes in sales and acquisitions in Q2, our focus during the second half of the year will be on improving operational activities in Finland and Sweden


sami ensio

Net sales in the second quarter of 2022 were EUR 16.9 million, representing a year-on-year decrease of 2.0 percent. Net sales in Denmark and Norway increased in the second quarter, but net sales in Finland and Sweden decreased due to the weakened invoicing ratio and challenges in individual project deliveries. The operating margin (EBITDA) decreased by 34.3 percent year-on-year and was EUR 1.4 million (8.1 percent of net sales). EBITDA was positive in all countries except Sweden. The decrease in EBITDA was mainly attributable to lower net sales.

Net sales in the first half of 2022 were EUR 33.9 million, representing a year-on-year decrease of 3.4 percent. Taking the sale of the Prime business in 2021 into consideration, comparable net sales decreased by 1.8 percent. In the first half of the year, net sales increased in Denmark and Norway but decreased in Finland and Sweden. The operating margin (EBITDA) decreased by 49.4 percent year-on-year and was EUR 3.4 million (10.1 percent of net sales). EBITDA was positive in all countries except Sweden. The operating margin in 2021 included a capital gain of approximately EUR 2.6 million from the sale of the Prime business, without which the comparable change would have been a decrease of 18.5 percent. The order backlog was EUR 77.2 million at the end of the quarter, which shows a year-on-year increase of 6.1 percent and is the highest in Innofactor’s history.

Our sales performance was strong in the second quarter. Contracts won by Innofactor included Senate Properties’ case and document management system and related maintenance and further development services, approximately EUR 2.2 million, the delivery of managed cloud services that support a Danish pharmaceutical company’s data integration platform, approximately EUR 2.1 million, IT expert services to support the development and maintenance of a Microsoft Dynamics 365 CRM system for the State Treasury of Finland, approximately EUR 5.0 million, the maintenance and development of a grant and case management system for the Funding Centre for Social Welfare and Health Organisations (STEA), approximately EUR 1.8 million, and a case and document management system, as well as related maintenance and support services, for the Greater Stockholm Fire Brigade (Storstockholms brandförsvar), approximately EUR 0.35 million.

The case and document management system for the Greater Stockholm Fire Brigade is a particularly important strategic achievement, as it is the first delivery of our Dynasty product outside Finland. We see very attractive opportunities in Sweden and the other Nordic countries for significant market growth over the next few years with the help of our Dynasty product, which has become the market leader in Finland.

In June, Innofactor acquired Invenco Ltd, a company that specializes in data and analytics. Invenco is a long-term Microsoft partner. Invenco has approximately 50 employees, of whom 35 are senior data professionals. The company has four offices in Finland: Vantaa, Oulu, Tampere and Kuopio. Invenco’s net sales were approximately EUR 6 million and EBITDA approximately 5 percent. Innofactor’s objective going forward is to grow Invenco’s net sales and improve its profitability through synergies, among other things. The purchase price (Enterprise Value, EV) consists of a fixed purchase price of EUR 3.0 million and an additional purchase price tied to three years’ net sales growth, which will amount to EUR 3.75 million at a maximum. We see significant growth opportunities in the area of data and analytics, and we will pursue these opportunities together with the professionals we acquired as part of the Invenco acquisition.

We cannot be satisfied with our operational performance in Finland and Sweden in the first half of 2022. We have initiated measures to improve our performance, and these measures will continue throughout the second half of the year. We see significant potential particularly in increasing our project profitability and invoicing rate by having an even stronger focus on our work with customers. During the second half of the year, we also aim to ensure the seamless integration of Invenco into Innofactor’s operations.

Innofactor’s aim is to be the leading provider of organizations’ digital transformation in each of the Nordic countries. We believe in our chosen Nordic strategy and in reaching our long-term goals. This requires perseverance and determination from the company's management and employees as well as investors. 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.

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

Business Environment

We estimate that the growth rate of the Nordic IT services market will be positive in 2022, but because of the COVID-19 situation, we cannot give a more detailed estimate.

The key innovation trends and drivers of change in the market include metaverse, augmented reality, virtual reality, Internet of Things (IoT), artificial intelligence, robotics, blockchains, and quantum computing, with facilitating roles being played by software moving to the cloud, data analytics, social media, and the use of mobile devices. Combating climate change is placing new demands on both societies and organizations, creating new business opportunities and accelerating innovation. The purchasing behavior of our customers has evolved as part of this business transformation. Our customers’ expectations for their IT partner are characterized by a greater focus on business benefits rather than technological benefits. Our customers are looking for more out-of-the-box solutions that do not require extensive customer-specific customization. In addition, customers are increasingly seeking continuous services instead of large one-time projects.

We estimate that the IT service market in the Nordic countries grew by a few percent in 2021. We estimate that growth in the Nordic IT services market will continue in 2022, but because of the uncertain COVID-19 situation, we cannot give a more detailed estimate. Our estimate is based on research institutes’ forecasts and our own outlook on markets.

In the long term, we believe that the digital leap of society in response to the COVID-19 pandemic will increase Innofactor's possibilities to grow its business operations. The abilities of a modern digital organization will be even more important for our customers in the future. It is also possible that some of our customers will transfer some of their operations back to the Nordic countries in order to be closer to their customers. This would have a favorable effect as regards the business model of Innofactor's chosen strategy based on Nordic specialists. We also believe that Microsoft's position has strengthened during the COVID-19 pandemic. We believe in our chances of increasing our market share in the Nordic countries.

The competition in Microsoft-based solutions in the Nordic countries is fragmented. The first group of competitors consists of large enterprises that operate in all of the Nordic countries. These competitors provide a wide range of IT solutions that are needed by various organizations and use several competing technologies, one of which is the Microsoft ecosystem. The second group consists of medium-sized companies that focus on a niche solution area at the Nordic level, also using several different technologies. The third group consists of medium-sized companies operating mainly in a single country, typically providing a broad range of solutions based on several competing technologies. The fourth group consists of small companies that only operate in their domestic market focusing on certain clearly defined solution areas, technologies, and industries.

Microsoft’s fragmented Nordic partner network, which consists of small and medium-sized IT companies, continues to offer interesting acquisition opportunities for us. In the future, our acquisition strategy will likely be focused on medium-sized companies that operate in a single country. This will help us expand our offering at the country-specific level as well as potentially acquire additional cloud-based product and service business. Good reputation, fast and profitable growth, successful acquisitions, and entrepreneurial spirit will make us an attractive partner for reorganizations in the field.

Purpose, Mission, Vision and Strategy

Innofactor's strategy comprises our purpose, mission, vision, strategic choices, values, working principle, and long-term financial goals. 

Our purpose

Innovating to make the world work better

Our mission

Driving the modern digital organization

Our vision

Leading Nordic digital transformation partner in the Microsoft ecosystem

Our strategic choices

  • The most competent Nordic teams
  • Productized and specialized offering
  • Proactive and agile way of working
  • Innovation with top customers

Our values

  • Accountability
  • Empowerment
  • Innovation
  • Customer

Read more about our values.

Our working principle

Our principle is to put people first in everything we do. We want to create solutions that make people's everyday work and life run smoothly and bring a smile to their faces.

Our long-term financial goals

  • To achieve annual growth of about 20 percent, of which majority is intended to be achieved by organic growth
  • To achieve about 20 percent EBITDA in relation to the net sales
  • To keep the cash flow positive and secure solid financial standing in all situations

Strategy and its realization in the review period

Innofactor’s net sales in the first half of the year were EUR 33.9 million (2021: 35.1), representing a year-on-year decrease of 3.4 percent. Without the Prime business sold in the first quarter of 2021, the comparable change would have been a decrease of 1.8 percent. The net sales growth target is supported by Innofactor’s large order backlog of EUR 77.2 million (2021: 72.7). The Invenco acquisition adds inorganic growth to our business, but we have also initiated measures to improve our performance and net sales in Finland and Sweden, and those measures will continue through the rest of the year.

The operating margin (EBITDA) was 10.1% of net sales (2021: 19.2%). EBITDA decreased by 49.4 percent year-on-year, which was particularly attributable to the capital gain recognized on the sale of the Prime business in 2021. Without the sale of the Prime business, the operating margin (EBITDA) would have decreased by 18.5 percent year-on-year. The measures we have initiated in Finland and Sweden to improve our performance and net sales are also aimed at improving the operating margin.

Innofactor’s operating cash flow in the review period of January 1–June 30, 2022, was EUR 3.6 million (2021: EUR 6.9 million) and the equity ratio at the end of the review period was 41.1 percent (2021: 49.9 percent). Cash flow in 2021 was affected by EUR 2.2 million in proceeds from the sale of the Prime business. In connection with the Invenco acquisition, Innofactor took out a bank loan of EUR 2.5 million. The bank loan and the effect of consolidating Invenco into Innofactor’s balance sheet on June 30, 2022, reduced the equity ratio. The strong operating cash flow supports Innofactor’s strategic goal of profitable growth and securing solid financial standing in all situations.

Key Figures

2021

2020

2019

2018

2017

Net sales, EUR thousand

66,364

66,164

64,198

63,144

66,088

Operating profit before depreciation
and amortization (EBITDA), EUR thousand

10,111 

7,164

5,089

-1,029

1,308

percentage of net sales

15.2% 

10.8%

7.9%

-1.6%

2.0%

Operating profit (EBIT), EUR thousand

6,519

2,501

795

-3,872

-1,461

percentage of net sales

9.8%

3.8%

1.2%

-6.1%

-2.2%

Earnings before taxes, EUR thousand

5,730

2,050

12

-3,811

-1,579

percentage of net sales

8.6%

3.1%

0.0%

-6.0%

-2.4%

Earnings, EUR thousand

4,504

1,761

418

-3,462

-2,007

percentage of net sales

6.8%

2.7%

0.7%

-5.5%

-3.1%

Shareholders' equity, EUR thousand

25,404

23,444

22,145

21,303

24,764

Interest bearing liabilities, EUR thousand

9,818

15,386

16,853

15,418

14,228

Cash and cash equivalents, EUR thousand

1,963

3,066

963

258

910

Deferred tax assets, EUR thousand

4,830

6,413

5,602

5,602

5,668

Return on equity

18.4%

7.7%

1.9%

-13.8%

-5.3%

Return on investment

20.6%

11.1%

2.3%

-7.7%

-2.4%

Net Gearing

30.9%

52.5%

71.8%

71.2%

53.8%

Equity ratio

51.1 %

42.2%

40.2%

41.2%

43.4%

Balance sheet total, EUR thousand

51,057

56,607

55,720

51,875

58,272

Research and development, EUR thousand

3,504

3,618

2,795

2,860

3,298

percentage of net sales

5.3%

5.5%

4.4%

4.5%

5.0%

Personnel on average during the year

516

544

534

591

610

Personnel at the end of the year

500

541

538

550

601

Number of shares at the end of the year

37,388,225

37,388,225

37,388,225

36,188,225

36,188,225

Earnings per share (EUR)

0.1208

0.0471

0.0113

-0.0880

-0.0357

Shareholders' equity per share (EUR)

0.6795

0.627

0.592

 0.589

0.684

Growth and Financial Targets

 

 

Innofactor's long term financial goals:

  • To achieve annual growth of about 20 percent, of which majority is intended to be achieved by organic growth
  • To achieve about 20 percent EBITDA in relation to the net sales
  • To keep the cash flow positive and securing solid financial standing in all situations

The main actions for reaching the approximately 20 percent growth and 20 percent operating margin:

  • Focus on selected industries and solution areas that provide the highest growth opportunities and allow us to best scale existing offering in the Nordics
  • Focus on current customers and cross sales to get a bigger share of wallet of customers' digital transformation budgets
  • Improving modern digital marketing and sales skills to achieve better and more cost-effective sales results
  • Focus on competence planning, recruiting and resource optimization across Nordics
  • Shifting revenues from projects and professional services toward products, IP-based and continuously managed services that support selected solution areas and industries
  • Strengthening continuously our specialists' professional skills and improving our leading offering in order for our customers to pay hour price above market average
  • Aiming to move to self-organized teams and to reduce organizational layers achieving better communication and faster decision making
  • Developing our flexible value-adding delivery model by minimizing unnecessary work, by improving our invoicing rate in delivery projects, consultancy and expert work, as well as by maximizing customer satisfaction

Customers

Innofactor’s business operations were focused on Finland, Sweden, Denmark and Norway. During the period January 1–June 30, 2022, approximately 65 percent of the net sales came from Finland, approximately 16 percent from Sweden, approximately 12 percent from Norway, and approximately 7 percent from Denmark. Compared with the corresponding period in 2021, the net sales increased in Denmark and Norway, but decreased in Finland and Sweden.

During the period January 1–June 30, 2022, approximately 44 percent of the net sales came from commercial clients, approximately 44 percent from public sector clients, and approximately 12 percent from third-sector clients.

 

Distribution of net sales in January 1–June 30, 2022

distribution of net sales

Innofactor’s net sales for the review period of January 1–June 30, 2022, came from the following sources:

  • 38 percent from IT system delivery projects and consulting
  • 23 percent from services based on recurring service contracts, such as SaaS, cloud and hosting services, and from software maintenance
  • 36 percent from specialist work based on recurring service contracts, such as smaller customer-specific changes and the further development of IT systems
  • 3 percent from licenses, of which the share of licensing income to third parties was approximately 1 percent of net sales

Innofactor’s 10 largest clients accounted for approximately 28 percent of the net sales for the review period January 1–June 30, 2022.

 

Get to know our customer stories 

Personnel

People First and a Smile on the Face Every Working Day – in Spite of COVID-19

In line with our mission, we continue to build Innofactor as a modern digital organization. We develop our operating models to support the daily work of our employees within our Nordic organization. Highly competent and motivated employees, good leadership practices, effective teamwork, self-organization and company-wide practices support Innofactor’s long-term goals. Our principle is to put people first in everything we do. We want to create an inspiring hybrid work environment for our employees and also have fun while working.

Number of Personnel

Block image

Innofactor primarily monitors the number of active personnel. The number of active personnel does not include employees who are on leave for more than 3 months.

The average number of active personnel during the period April 1–June 30, 2022, was 527 (2021: 524), representing an increase of 0.6 percent. Compared to the previous quarter (Q1/2022: 499), the increase was 5.6 percent.

At the end of the review period, the number of active personnel was 577 (2021: 526), representing an increase of 5.9 percent. Compared to the previous quarter (Q1/2022: 502), the increase was 11 percent. The figures for the end of the review period include the personnel acquired as part of the Invenco acquisition, who were transferred to Innofactor on 30 June 2022.

At the end of the review period, the average age of the personnel was 42.7 years (2021: 42.1). Women accounted for 25 percent (2021: 27%) of the personnel. Men accounted for 75 percent (2021: 73%) of the personnel.

Get to know our people!

 

Self-Organized Hybrid Work in the New Normal

Innofactor transitioned successfully to remote work in 2020 in response to COVID-19 restrictions. It is estimated that, where necessary, it has been possible to perform over 98 percent of tasks remotely at Innofactor. We regularly monitored the various stages of the COVID-19 pandemic in 2021, changed our instructions and organized COVID-19 briefings for our personnel as needed. Our aim has been to issue timely recommendations regarding remote work and in-office work. We conducted a personnel survey in spring 2021, based on which we created new operating models for remote work and in-office work. At the same time, we instructed teams to agree on regular practices concerning working methods.

Going forward, Innofactor will use a hybrid approach, which involves working at the office, at the customer’s premises and remotely, depending on what is the most appropriate choice in each situation. Teams agree on their operating models and rules concerning their working methods. Choices are guided by customer requirements. Teams are recommended to choose in-office days – for example, one or two days per week – when the team works together in the same physical location, either at the office or at the customer’s premises. We have also planned changes to our offices to support hybrid work even more effectively.

Our operating models in the new normal are based on our self-organizing culture, which means that teams are empowered to plan their work. At the same time, we want to support a strong sense of community and team spirit, so we strongly encourage teams, units and departments to have common in-office days. In spite of COVID-19, we opened a new office in Jyväskylä in late 2021. We believe that physical offices play a role as important meeting places and hold potential for attracting talent from various parts of the Nordic region. In 2021, we recruited over 100 new professionals to work at Innofactor.

During the COVID-19 pandemic, Innofactor has focused particularly on supporting remote work and related operating models. In managerial work, special focus has been placed on virtual meetings and active correspondence. Self-management and occupational well-being have been supported with due consideration for the exceptional circumstances. Exercise breaks, mindfulness practice and various online training activities provided by the company have been popular among the employees. The regular sharing of information has also played a central role. We have also supported remote work by offering the opportunity to borrow equipment (such as external displays) for use in the home office to make remote work as productive and ergonomic as possible.

From the perspective of psychological well-being, it is important to be able to meet people – both colleagues and customers – even during COVID-19. We have emphasized the importance of safety in that context. In August 2021, we were among the first in Finland to organize an outdoor customer event using the COVID-19 passport. The event was organized in co-operation with our occupational health service provider Mehiläinen. Admission to the event was subject to having a COVID-19 passport or a negative result on a rapid test administered by our occupational health service provider at our head office, the Innofactor Campus in Espoo, in connection with the event. The COVID-19 passport was also used at other Innofactor customer events and voluntary personnel events during the year.

Talented Employees at the Core of Our Business

Innofactor aims to invest in competence development at the Nordic level. Our Executive Board was joined on April 1, 2021, by a new Chief Innovation and Talent Officer, Martin Söderlind, whose role is to determine what competencies we need now and in the future, and to ensure that we have access to these competencies. He is supported by Anni Pokkinen, HR Director, Nordic Development & Operations.

We organized diverse training through Innofactor Academy in 2021. Innofactor Academy brings together Innofactor's training activities at the local level as well as the Nordic level. We continued to support remote work, particularly through training activities and lectures focused on coping with the demands of work. We also organized training related to Microsoft technology, basic induction training, as well as ITIL and SCRUM training. As the COVID-19 pandemic continued, we strengthened our position in facilitating remote training. This enabled us to develop our range of training activities and engage in closer Nordic co-operation regarding training. Going forward, we will also focus increasingly on the certification of our employees.

We want to focus on training young people and offering jobs to new graduates. We organized our third Innofactor DigiStar Trainee Program, the purpose of which is to provide a diverse induction training period for new professionals, followed by learning on the job. We hired 14 DigiStar trainees in 2021.

Our Nordic Approach and Modern Operating Models Support Our Work

Innofactor’s goal is to build a company with Nordic integration. Common systems, processes and culture support Innofactor’s strategic targets and co-operation between countries. We continued the development of our Nordic operating models in 2021. For example, the bonus models for the personnel were harmonized and all Innofactor employees were placed under the same bonus program. At the beginning of the year, all of the employees were given the opportunity to try the development discussion platform deployed by Innofactor.

The self-organizing operating model and full-time manager model were adopted in the remaining Finnish units at the beginning of 2021. The full-time manager model was also implemented in Sweden and the first steps toward self-organization were taken. The plan is to implement a corresponding model in Innofactor's other operating countries in 2022–2023.

We Invest in Good Leadership

Every employee has the right to good leadership. The continuous development of leadership is a key focus area for Innofactor. In addition to the quarterly employee satisfaction survey, all managers participated in a comprehensive 360° evaluation. According to the results, the quality of leadership at Innofactor is already better than the European benchmark by a clear margin, and the results showed further improvement compared to 2020. We want to continue our development and build a leadership culture that supports and develops self-organization and our specialists while making Innofactor an even better place to work.

Smiling at Work is Allowed

At Innofactor, people work together and support each other. We want work to be both meaningful and fun. This is underpinned by good leadership and common working practices, but especially by great colleagues and a fantastic team spirit. 

We organize recreational events for our personnel, both in teams and at the corporate level. There were still many COVID-19 restrictions in place in 2021, and we had to adapt the events we traditionally organize. Our annual Nordic summer event, InSpirit, was organized as a hybrid event. The official content was produced virtually for each of our operating countries and the evening festivities were arranged locally, taking safety considerations into account. 

Innofactor’s Fun Club is a long-standing concept for shared activities by employees during workdays. In 2021, we organized a virtual May Day event in Finland, which was very popular, as well as diverse events ranging from remote chocolate tasting to a golf tournament and a painting workshop. In November, we were able to have Pre-Christmas parties at our offices, for the most part, before the COVID-19 situation deteriorated again. We also organized many team days and meetings. Ensuring COVID-19 safety was the highest priority in all meetings.

In 2021, we also organized our first-ever Share Your Cool Thing virtual event to present highlights of customer projects from the past year to our personnel. The event combined knowledge sharing, networking and celebrating Innofactor’s highly capable teams.

Offering

We help our customers to succeed by modernizing and digitalizing their organizations. We put people first in everything we do. We want to create solutions that make people's everyday work and life run smoothly and bring a smile to their faces.

In the last two decades, technology has revolutionized how organizations function in a myriad of wonderful ways. However, taking advantage of digitalization is still often a challenge. That’s why here at Innofactor we have made it our mission to help our customers transform into Modern Digital Organizations, which take full advantage of the opportunities brought by hybrid work, data, and the cloud.

In fact, making it easier for people and organizations to work wonders is at the heart of everything we do. It’s this passion to make the world work better that’s enabled our talented cloud technology professionals to successfully collaborate with approximately 1,000 private, public, and third sector customers across the Nordic region. 

To do this, we work in six solution areas, which we consider the building blocks of a Modern Digital Organization.


Our Modern Delivery Model Ensures Effective Deployment and Adoption to Maximize the Lifetime Value of New Solutions

Our delivery model is based on years of experience in the successful design, adoption and development of modern services. It consists of five stages, each of which delivers our customers quick, tangible value in each of the six solution areas of our offering. The value of our deliveries is based on not only helping our customers to design and implement a specific solution, but also supporting them all way from defining a vision and governance to adoption and continuous development.

delivery model

read more about our solutions for modern digital organization

Acquisitions

 

20 June, 2022
Innofactor signed a contract to acquire the entire share capital of the Finnish company Invenco Oy.
See Stock Exchange Release for more details.
 

31 December, 2020
During the first quarter of 2020, Innofactor increased its holding in Arc Technology Oy by 26.94 percent to a total of 45.13 percent. Starting from the Q2/2020 interim report, Arc Technology Oy was reported as a subsidiary, because Innofactor has had control over the company since April 2020. Innofactor's holding in the company increased to 100% on December 30, 2020. For 2020, Arc Technology Oy increased Innofactor's net sales by approximately EUR 0.8 million. Arc Technology Oy was renamed as Innofactor HRM Oy in early 2021. See the Press Release (in Finnish).


10 October, 2016

Innofactor signed a contract to acquire the entire share capital of the Lumagate group.
See Stock Exchange Release for more details.


22 December, 2015

Innofactor signed a contract to acquire the entire share capital of the Swedish company Cinteros AB.
See Stock Exchange Release for more details.


22 December, 2015

Finnish Arc Technology, which is focused on HR systems, bought Innofactor Plc's HRM (Human Resources Management) business.
See press release for more details.


31 December, 2013

Innofactor signed a contract to acquire the entire share capital of Enabling Group.
See Stock Exchange Release for more details.


30 September, 2013

Innofactor acquired Dynamic Team (company name Lainetar Oy, based in Tampere, Finland) and its business in order to strengthen its offering in the Microsoft Dynamics AX business area.
See press release for more details.


6 June, 2013

Innofactor signed a contract to acquire the entire share capital of atBusiness Ltd.
See Stock Exchange Release for more details.


30 November, 2012

Innofactor signed a contract to acquire the Microsoft project and project portfolio management solutions business from Tietotalo Infocenter Ltd.


25 June, 2012

Innofactor signed a contract to acquire the entire share capital of Bridgeconsulting A/S.
See Stock Exchange Release for more details.


3 December, 2010

Westend ICT Plc and Innofactor Ltd merged to become the Innofactor Plc Group.
See Stock Exchange Release for more details.


3 June, 2010

Visual Management Ltd became part of Innofactor Software Ltd.


12 October, 2009

Innofactor Software Ltd acquired Software Innovation Finland Ltd.


1 April, 2007

Innofactor purchased the Enfo Ltd business unit responsible for electronic business solutions.


15 December, 2004

Innofactor Software Ltd acquired TietoEnator Plc's parish-software business.

Sustainability

Innofactor considers sustainability as one of the cornerstones of its long-term success. Sustainability is not only a condition for the continuation of operations. It also represents a way of responding to stakeholder expectations. Technology companies play a significant role in the mitigation of – and adaptation to – climate change. The IT sector also makes it possible for other organizations to reduce their carbon footprint.

Innofactor's operations are guided by our Code of Conduct and environmental policy, in addition to which we comply with the leading international sustainability standards, such as the ILO Declaration on Fundamental Principles and Rights at Work, the UN Universal Declaration of Human Rights, the UN Sustainable Development Goals, and the principles of the ICC Business Charter for Sustainable Development.

Innofactor's internal operations are managed through predefined core processes and standards. The key processes related to sustainability include the company's processes relating to legal affairs, risk management and human resources, which govern many of the main aspects of corporate responsibility. The framework for Innofactor's operations is provided by the ISO 9001, ISO 27001, ISO 13485 and AQAP-2110 standards, which the company's various processes adhere to.

Innofactor is committed to supporting the achievement of the UN Sustainable Development Goals (SDGs) by 2030. Accordingly, we have mapped the main objectives from the perspective of our business operations.

In autumn 2021, Innofactor signed the Microsoft Partner Pledge to commit to the development of digital skills, diversity, ethical AI and environmental responsibility.

Read more about Innofactor's sustainability

Future Outlook

Innofactor’s future outlook for 2022

Innofactor's net sales and operating margin (EBITDA) in 2022 are estimated to increase from 2021, during which net sales were EUR 66.4 million. Innofactor's operating margin (EBITDA) for 2022 is estimated to increase from EUR 7.5 million, which would have been the operating margin for 2021 without the proceeds of EUR 2.6 million from the sale of the Prime business.

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