Innofactor Plc's Interim Report for January 1–September 30, 2021 (IFRS)

Hero Image

26.10.2021 09:00 EEST (UTC +3)

Innofactor Plc Interim Report October 26, 2021, at 9:00 Finnish time

 

Innofactor achieved its highest-ever operating margin in the third quarter in spite of a slight decrease in net sales due to a divestment and an organizational change in Finland


July–September 2021 in brief:

  • Net sales were approximately EUR 13.7 million (2020: 14.0), representing a decrease of 2.0%
    • Excluding the Prime business sold on March 31, 2021, the comparable growth was 3.0%, which was entirely organic growth
  • The operating margin was approximately EUR 1.7 million (2020: 1.6), representing an increase of 8.7%
  • The operating profit was EUR 0.9 million (2020: 0.4), representing growth of 130.4%
  • The order backlog at the end of the review period was EUR 72.0 million (2020: 58.2), representing an increase of 23.7%


January–September 2021 in brief:

  • Net sales were approximately EUR 48.8 million (2020: 47.9), representing an increase of 1.9%
    • Excluding the Prime business sold on March 31, 2021, comparable growth was 4.9%, which was entirely organic growth
  • The operating margin was approximately EUR 8.4 million (2020: 5.6), representing an increase of 51.4%
    • The operating margin includes a sales gain of approximately EUR 2.6 million from the sale of the Prime business, without which the operating margin would have been approximately EUR 5.9 million (2020: 5.6), representing an increase of 5.6%
  • The operating profit was EUR 6.0 million (2020: 2.1), representing an increase of 185.9%
    • The operating profit includes a corresponding sales gain as the operating margin, without which the operating profit would have been approximately EUR 3.4 million (2020: 2.1), representing an increase of 64.0%

 

Key figures of the group, IFRS

 

 

 

 

Jul 1–Sep 30, 2021

Jul 1–Sep 30, 2020

Change

 

Jan 1–Sep 30, 2021

Jan 1–Sep 30, 2020

Change

Net sales, EUR thousand

 

13,730

14,005

-2.0%

 

48,834

47,913

1.9%

Growth of net sales

 

-2.0%

0.3%

 

 

1.9%

2.5%

 

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

 

1,695

1,559

8.7%

 

8,448

5,579

51.4%

percentage of net sales*

 

12.3%

11.1%

 

 

17.3%

11.6%

 

Operating profit/loss (EBIT), EUR thousand*

 

915

397

130.4%

 

5,996

2,097

185.9%

percentage of net sales*

 

6.7%

2.8%

 

 

12.3%

4.4%

 

Earnings before taxes, EUR thousand*

 

755

26

2,754.8%

 

5,400

1,099

391.2%

percentage of net sales*

 

5.5%

0.2%

 

 

11.1%

2.3%

 

Earnings, EUR thousand*

 

581

27

2,087.5%

 

4,207

1,505

179.6%

percentage of net sales*

 

4.2%

0.2%

 

 

8.6%

3.1%

 

Order backlog

 

71,979

58,181

23.7%

 

71,979

58,181

23.7%

Net gearing*

 

34.0%

66.7%

 

 

34.0%

66.7%

 

   Net gearing without IFRS 16

 

21.2%

48.1%

 

 

21.2%

48.1%

 

Equity ratio

 

52.9%

43.5%

 

 

52.9%

43.5%

 

   Equity ratio without IFRS 16

 

56.8%

45.8%

 

 

56.8%

45.8%

 

Active personnel on average during the review period**

 

508

545

-6.8%

 

493

549

-10.2%

Active personnel at the end of the review period**

 

497

546

-9.0%

 

497

546

-9.0%

Earnings per share (EUR)

 

0.0155

0.0007

2,087.5%

 

0.1125

0.0402

179.6%

 

*) In accordance with IFRS 3, the operating result for July 1–September 30, 2021, includes EUR 113 thousand (2020: 473) and for January 1–September 30, 2021, EUR 390 thousand (2020: 1420) in depreciation related to acquisitions, consisting of allocations of the purchase price to intangible assets.

**) 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 2021

Innofactor’s net sales and operating margin (EBITDA) in 2021 are estimated to increase from 2020, during which the net sales were EUR 66.2 million and operating margin was EUR 7.2 million.

CEO Sami Ensio’s review: Innofactor updated its strategy and restructured its Finnish organization to better support future growth

Net sales in the third quarter of 2021 were EUR 13.7 million, representing a year-on-year decrease of 2.0 percent. Excluding the Prime business sold on March 31, 2021, the year-on-year growth rate in the third quarter would have been 3.0 percent, consisting entirely of organic growth. The operating margin (EBITDA) grew by 8.7 percent year-on-year and came to EUR 1.7 million (12.3 percent of net sales). EBITDA was positive in Finland, Norway and Denmark. In the third quarter, the order backlog was roughly at the same level as in the previous quarter. The order backlog amounted to EUR 72.0 million at the end of the quarter, representing year-on-year growth of 23.7 percent.

Net sales for the first nine months of 2021 amounted to EUR 48.8 million, representing year-on-year growth of 1.9 percent. Excluding the Prime business sold on March 31, 2021, from April 1, 2021, onwards the comparable rate of growth was 4.9 percent, consisting entirely of organic growth. The operating margin (EBITDA) grew by 51.4 percent year-on-year and was EUR 8.4 million (17.3 percent of net sales), of which the sale of the Prime business during the first quarter accounted for approximately EUR 2.6 million.

At the end of August, Innofactor decided to renew its strategy to support growth even more strongly. In our strategy work, we defined the areas in which we see the strongest growth potential regarding our business and Microsoft’s solution offering. Innofactor tightened its offering according to the growth areas in question: Digital Services, Business Solutions, Information and Case Management, Data and Analytics, Cloud Infrastructure and Cybersecurity.

At the same time, it was decided to restructure the Finnish organization to correspond to the growth areas of the new strategy. As of October 1, 2021, Innofactor has had six business units in Finland, corresponding to the offering presented above. The aim of the organizational renewal is to strenghten Innofactor's growth in Finland in the future. The restructuring of operations caused a temporary decrease in Innofactor's net sales in Finland in the third quarter.

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.

Strategy and its realization in the review period

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

Our working principle: Our principle is to put people first in everything we do. We want to provide solutions that make our customers’ 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, the majority of which 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 good financial standing in all situations.

Innofactor’s net sales in January–September 2021 were EUR 48.8 million (2020: 47.9), representing year-on-year growth of 1.9 percent. Excluding the Prime business sold on March 31, 2021, from April 1, 2021, onwards the comparable rate of growth was 4.9 percent, consisting entirely of organic growth. During the first nine months of the year, Finland, Norway and Denmark accounted for the growth. The net sales growth target is supported by Innofactor’s large order backlog of EUR 72.0 million (2020: 58.2). In 2021, Innofactor will pay special attention to management of growth, sales, expertise and resourcing, in connection with which we have restructured our organization, among other measures.

The operating margin (EBITDA) grew in the review period by 51.4 percent year-on-year and came to EUR 8.4 million (17.3 percent of net sales). Without the divestment of the Prime business, the operating margin would have grown by 5.6 percent in the review period and would have been EUR 5.9 million (12.1 percent of net sales). As regards profitability (excluding the Prime divestment), Innofactor was able to improve its performance slightly, but more work is still needed to achieve the long-term goal of approximately 20 percent.

Innofactor’s operating cash flow in the review period of January 1–September 30, 2021, was EUR 6.2 million (2020: EUR 4.9 million) and the equity ratio at the end of the review period was 52.9 percent (2020: 43.5 percent). In the review period, Innofactor repaid approximately EUR 2.7 million of its loans prematurely. The strong operating cash flow and financial position support Innofactor’s strategic goal of profitable growth and securing solid financial standing in all situations.

 

Espoo, October 26, 2021

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–September 30, 2021

Innofactor will publish the Interim Report for January–September 2021 on Tuesday, October 26, 2021, at approximately 9:00 Finnish time.

A video conference in Finnish concerning the interim report will be held for media, investors and analysts on the same day at 10:00 Finnish time. The corresponding video conference in English will be held at 12:00 Finnish time. The report will be presented by CEO Sami Ensio and CFO Markku Puolanne.

Please register for the conferences beforehand by sending email to ir@innofactor.com. The link for participating will be sent to the registered persons on the previous day.

The presentations will be available on Innofactor's web site after the conferences.

Distribution:
NASDAQ Helsinki
Main media
www.innofactor.fi

Innofactor
Innofactor is the leading driver of the modern digital organization in the Nordic Countries for its approximately 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. In 2016–2020, the annual growth of Innofactor's net sales has been approximately 8.3%. The Innofactor Plc share is listed in the technology section of the main list of NASDAQ Helsinki Oy. www.innofactor.com  #ModernDigitalOrganization #HybridWork #PeopleFirst #CreatingSmiles

 

Attachment: Innofactor Plc's Interim Report for January 1–September 30, 2021 (IFRS)

Cookies

To provide you with a better user experience, we use cookies on our site. By continuing to browse the site you agree to the storage of cookies on your device.