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Innofactor Plc’s Interim Report for January 1–March 31, 2023 (IFRS)

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25.04.2023 09:00 CEST/EET (UTC +2)

Innofactor Plc Interim Report April 25, 2023, at 9:00 Finnish time


Innofactor’s strong growth continued in the first quarter of 2023

January–March 2023 in brief:

  • Net sales were approximately EUR 20.2 million (2022: 17.0), representing an increase of 19.2%
    • Organic growth, excluding the Invenco business acquired in June 2022, was 10.9%
  • The operating margin was approximately EUR 2.5 million (2022: 2.0), which shows an increase of 21.8%
  • Operating profit was EUR 1.7 million (2022: 1.3), which shows an increase of 29.8%
  • The order backlog at the end of the review period was EUR 76.3 million (2022: 71.3), representing an increase of 6.9%
  • Innofactor received several significant orders in the first quarter, for example:
    • Digitalization project concerning Metso Outotec Plc’s quotation process, approximately EUR 0.7 million
    • Continued development and maintenance of Senate Properties’ HR system, approximately EUR 0.8 million
Key figures of the group, IFRS      
Jan 1–Mar 31, 2023 Jan 1–Mar 31, 2022 Change
Net sales, EUR thousand 20,223 16,964 19.2%
Growth of net sales 19.2% -4.7%  
Operating result before depreciation and amortization (EBITDA), EUR thousand 2,487 2,042 21.8%
percentage of net sales 12.3% 12.0%  
Operating profit/loss (EBIT), EUR thousand 1,712 1,319 29.8%
percentage of net sales 8.5% 7.8%  
Earnings before taxes, EUR thousand 1,311 1,102 18.9%
percentage of net sales 6.5% 6.5%  
Earnings, EUR thousand 1,036 846 22.5%
percentage of net sales 5.1% 5.0%  
Order backlog 76,293 71,336 6.9%
Shareholders’ equity, EUR thousand 26,162 26,219 -0.2%
Return on equity 4.0% 3.2%  
Interest-bearing liabilities, EUR thousand 14,146 10,859 30.3%
Cash and cash equivalents, EUR thousand 5,493 3,919 40.2%
Deferred tax assets, EUR thousand 3,782 4,542 -16.7%
Return on investment 5.0% 3.8%  
Net gearing 33.1% 26.5%  
Net gearing without IFRS 16 16.4% 10.1%  
Equity ratio 47.3% 51.7% -8.6%
Equity ratio without IFRS 16 51.3% 56.5%  
Balance sheet total, EUR thousand 59,105 54,761 7.9%
Research and development, EUR thousand 1,201 1,088 10.4%
percentage of net sales 5.9% 6.4%  
Active personnel on average during the review period* 567 499 13.6%
Active personnel at the end of the review period* 572 502 13.9%
Earnings per share (EUR) 0.03 0.02 22.5%

*) Innofactor Group monitors the number of active personnel. The number of active personnel does not include employees who are on leave for more than three months.

Innofactor’s future outlook for 2023

Innofactor’s net sales and operating margin (EBITDA) in 2023 are estimated to increase from 2022, during which net sales were EUR 71.1 million and operating margin was EUR 7.8 million.

CEO Sami Ensio’s review: Investing in the personnel supports the achievement of business objectives

Net sales in the first quarter of 2023 amounted to EUR 20.2 million, representing year-on-year growth of 19.2 percent. The rate of organic growth, excluding the Invenco business acquired in June 2022, was 10.9 percent. The operating margin (EBITDA) increased by 21.8 percent year-on-year and was EUR 2.5 million (12.3 percent of net sales). EBITDA was positive in all of our operating countries. The order backlog at the end of the quarter was EUR 76.3 million, representing year-on-year growth of 6.9 percent.

We were successful in sales in the first quarter. Among other contracts, we won a digitalization project concerning Metso Outotec Plc’s quotation process, valued at approximately EUR 0.7 million, and the continued development and maintenance of Senate Properties’ HR system, valued at approximately EUR 0.8 million. We are grateful to all of our clients for their trust in Innofactor’s services.

In April 2023, Innofactor became the third Finnish company to be awarded Microsoft's highest partner designation Solutions Partner for Microsoft Cloud for its comprehensive expertise in all Microsoft solution areas. Earning the highest designation requires achieving all six Microsoft Solutions Partner designations, and it demonstrates Innofactor's comprehensive technical expertise and capability for delivering modern cloud solutions to customers in all Microsoft solution areas. We would like to thank Microsoft for its appreciation of Innofactor and for our excellent cooperation over the decades. Being rewarded with the Solutions Partner for Microsoft Cloud designation demonstrates our ability to help our customers succeed across all Microsoft solution areas. We are proud of our achievements, expertise, professionals, customers, and partners.

In the first quarter, we managed to further enhance the efficiency of our operations and improve our invoicing rate when compared to the final quarter of 2022. Innofactor’s number of personnel increased by over 13 percent year-on-year. We also increased the use of subcontracting. The increased number of personnel involved in customer work promoted the growth of net sales and the operating margin.

We want to focus on training young people and offering jobs to new graduates. In 2023, we are organizing our fifth 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. Our target for 2023 is to increase the number of DigiStar participants to over 60, up from 37 last year. We received a record-breaking number of applications – over one thousand – in the first DigiStar recruitment round this year. A small number of the DigiStar participants already started in the first quarter, with most starting the program in April–May. The DigiStar trainees have a significant impact on the average age of our personnel. In the first quarter, the average age of our personnel did not increase at all, remaining the same as a year earlier.

During the first quarter, we carried out a directed personnel share issue with a record-high number of 211 employees participating. Subscriptions were made in all of Innofactor’s operating countries: Finland, Sweden, Denmark and Norway. I am very pleased about the active participation of our personnel, which speaks to our employees’ strong commitment to the achievement of Innofactor’s long-term objectives.

Innofactor concluded a company-specific collective agreement in Finland. The aim of the company-specific collective agreement is to provide our employees with an even better and easier-to-understand agreement. Under the terms of the collective agreement, our employees are provided with, for example, substantially more equal opportunities for paid family leave, regardless of whether the person is the birthing parent or the non-birthing parent. We wanted the collective agreement to cover key issues for our company, such as flexible working hours and the Worktime Bank. The agreement also incorporates certain wishes expressed by our personnel, including paid participation in voluntary training organized by the Finnish Defence Forces. We believe that the company-specific collective agreement helps us to further improve the job satisfaction of our existing employees and attract new employees.

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 the first quarter were EUR 20.2 million (2022: 17.0), representing year-on-year growth of 19.2 percent. The net sales growth target is supported by Innofactor’s large order backlog of EUR 76.3 million (2022: 71.3). Innofactor aims to continue to take measures that support the growth of net sales.

The operating margin (EBITDA) was 12.3 percent of net sales (2022: 12.0%). EBITDA for the review period increased by 21.8 percent year-on-year. While profitability has improved, continued attention and efforts by the management are still needed in the coming years to reach the long-term target of approximately 20 percent.

Innofactor’s operating cash flow for the review period January 1–March 31, 2023, was EUR 3.9 million (2022 Q1: EUR 2.7 million) and the equity ratio at the end of the review period was 47.3 percent (2022: 51.7 percent). The equity ratio was reduced by the loan of approximately EUR 2.5 million taken out in June 2022 for the purpose of the Invenco Oy acquisition, as well as increased lease liabilities due to extensions of leases. Innofactor’s strong operating cash flow supports the company’s strategic goal of profitable growth and securing a solid financial standing in all situations.

The key actions to be taken to achieve growth of approximately 20 percent and EBITDA of approximately 20 percent:

  1. We will improve the efficiency of our operations and increase our invoicing rate by five percentage points. This will be achieved by, for example, improving the management of project and service contracts, enhancing the cross-resourcing of personnel between countries and units, reducing employee turnover and developing our self-directed team models.
  2. We will increase the share of licenses and SaaS services to over 33 percent of net sales from the current level of approximately 27 percent. This will be achieved by, for example, developing our offering, such as the new MDRaaS service (CSOC) and by focusing our sales efforts on customers and solution areas with the highest growth potential and that present the best opportunities for scaling our existing offering in each of the Nordic countries.
  3. We will increase the number of employees engaged in invoiced services. This will be achieved by, for example, doubling our recruitment of new university graduates to over 60 employees in 2023, concentrating the recruitment of senior professionals to our Nordic recruitment team, increasing the competence of our employees through certifications, reducing employee turnover, improving the efficiency of subcontracting and investing in the development of our employer image.
  4. We will become an even more proactive player in the Nordic M&A field. This will be achieved by, for example, through the internal reorganization of operations, emphasizing the role of country directors in actively seeking new potential acquisition targets in their respective countries.

Espoo, April 25, 2023


Board of Directors


Additional information:
CEO Sami Ensio, Innofactor Plc
tel. +358 50 584 2029


Briefings concerning the Interim Report for January 1–March 31, 2023

Innofactor Plc will publish its interim report for January–March 2023 on Tuesday, April 25, 2023, at approximately 9:00 am Finnish time.

A video conference call for media, investors and analysts will be held in English on the same day beginning at 12:00 Finnish time. The report will be presented by CFO Markku Puolanne.

To participate in the conference, kindly register in advance by sending an e-mail to The participation link will be sent via e-mail to the registered participants the day before the conference.

Presentation materials will be available on Innofactor website after the conference.

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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