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Innofactor Plc’s Interim Report for January 1–September 30, 2023 (IFRS)

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24.10.2023 09:00 CEST/EET (UTC +2)

Innofactor Plc Interim Report October 24, 2023, at 9:00 Finnish time

Innofactor swam against the current in a challenging market and achieved its highest-ever third quarter net sales and EBITDA in spite of the order backlog decreasing

July–September 2023 in brief:

  • Net sales were approximately EUR 18.0 million (2022: 16.7), representing an increase of 8.0% (organic)
  • The operating margin was approximately EUR 2.0 million (2022: 1.8), which shows an increase of 10.9%
  • Operating profit was EUR 1.2 million (2022: 1.0), which shows an increase of 26.0%
  • The order backlog at the end of the review period was EUR 71.4 million (2022: 77.3), representing a decrease of 7.6%

January–September 2023 in brief:

  • Net sales were approximately EUR 58.3 million (2022: 50.6), representing an increase of 15.3%
    • Approximately EUR 55.7 million (10.0%) of the growth was organic, excluding the Invenco acquisition
  • The operating margin was approximately EUR 6.2 million (2022: 5.2), which shows an increase of 19.7%
  • Operating profit was EUR 3.9 million (2022: 2.9), which shows an increase of 32.5%
Key figures of the group, IFRS    
.   Jul 1–Sep 30, 2023 Jul 1–Sep 30, 2022 Change   Jan 1–Sep 30, 2023 Jan 1–Sep 30, 2022 Change
Net sales, EUR thousand   18,015 16,683 +8.0%   58,332 50,594 +15.3%
Growth of net sales   8.0% 21.5%     15.3% 3.6%  
Operating result before depreciation and amortization (EBITDA), EUR thousand   1,970 1,777 +10.9%   6,222 5,196 +19.7%
percentage of net sales   10.9% 10.7%     10.7% 10.3%  
Operating profit/loss (EBIT), EUR thousand*   1,209 959 +26.0%   3,904 2,946 +32.5%
percentage of net sales   6.7% 5.8%     6.7% 5.8%  
Earnings before taxes, EUR thousand*   1,428 759 +88.0%   3,551 2,500 +42.0%
percentage of net sales   7.9% 4.6%     6.1% 4.9%  
Earnings, EUR thousand*   1,064 599 +77.8%   2,560 1,992 +28.5%
percentage of net sales   5.9% 3.6%     4.4% 3.9%  
Order backlog   71,412 77,251 -7.6%   71,412 77,251 -7.6%
Net gearing*   48.6% 56.9%  -14.6%   48.6% 56.9%  -14.6%
Net gearing without IFRS 16   35.0% 41.8%  -16.3%   35.0% 41.8%  -16.3%
Equity ratio   46.3% 43.7%  +6.0%   46.3% 43.7% +6.0%
Equity ratio without IFRS 16   49.5% 46.8%  +5.8%   49.5% 46.8%  +5.8%
Active personnel on average during the review period*   585 555 +5.4%   577 527 +9.5%
Active personnel at the end of the review period*   594 554 +7.2%   594 554 +7.2%
Earnings per share (EUR)   0.03 0.02 +77.8%   0.07 0.05 +28.5%

*) 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: Our strong order backlog and operational efficiency enabled growth and profitability in Q3 – we expect new sales to pick up in Q4

Net sales in the third quarter of 2023 amounted to EUR 18.0 million, representing year-on-year growth of 8.0 percent. The operating margin (EBITDA) grew by 10.9 percent year-on-year and came to EUR 2.0 million (10.9 percent of net sales). Innofactor’s net sales grew in Finland and Norway. EBITDA was positive in Finland but negative in other countries due to the challenging market situation.

Net sales for the first nine months of 2023 amounted to EUR 58.3 million, representing year-on-year growth of 15.3 percent. The operating margin (EBITDA) grew by 19.7 percent year-on-year and came to EUR 6.2 million (10.7 percent of net sales).

Price competition in the markets remained intense in the third quarter, although the weighted average prices of new contracts increased slightly from the preceding quarter. We anticipate prices will continue to rise in the fourth quarter, although we expect the situation to remain challenging until the end of the year. Carrying out loss-making business activities is not part of Innofactor’s strategy, which is why new sales in Q3 were still below target and led to a decrease in the order backlog. The order backlog decreased from the preceding quarter and amounted to EUR 71.4 million at the end of the review period, representing a year-on-year decrease of 7.6 percent. Nevertheless, our strong existing order backlog, framework agreements and other purchases by existing customers enable Innofactor to operate profitably in the short term. We expect to be able to increase the volume of new sales in Q4.

Generative artificial intelligence (ChatGPT, Microsoft Azure Open AI and Microsoft Copilot) has received growing attention in the market. Generative AI presents our customers – and Innofactor – with significant opportunities for improving operational efficiency. Above all, it opens up significant new business opportunities for Innofactor, and we have quickly developed new offerings in response to these opportunities. We see Microsoft 365 Copilot as particularly significant. It will become available on November 1, 2023, and we expect it will enable us to grow our business in co-operation with our main partner Microsoft.

The Board of Directors appointed Antti Rokala, M.Sc. (Econ.) as Innofactor Group’s new Chief Financial Officer (CFO). He will take up his post on January 2, 2024. At present, Rokala is working as Group CFO at the educational company YrkesAkademin in Stockholm. Rokala has previously worked in several financial management and leadership positions for the elevator company Schindler, such as Nordic CFO. Antti’s experience in Sweden and the other Nordic countries will help Innofactor further develop our business. I want to take this opportunity to extend a warm welcome to Antti.

Based on feedback from shareholders and analysts, we have decided to expand our reporting starting from the financial statements for the year 2023 by reporting key figures separately for our four solution areas. The reportable solution areas are as follows: 1) Digital services, 2) Business solutions, 3) Information and case management, and 4) Secure artificial intelligence, data and cloud platform. The following key figures will be reported for each solution area: net sales and the distribution of net sales, EBITDA, EBITDA margin, order backlog and the amount of product development. The key figures will be presented for the reporting period and the comparison period, and the percentage change for each key figure will be indicated.

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, employer promise, 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.

Employer promise: Be the real you

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 2023 amounted to EUR 58.3 million (2022: 50.6), representing year-on-year growth of 15.3 percent. Approximately EUR 55.7 million (10.0%) of the growth was organic, excluding the net sales derived from the Invenco acquisition. We are lagging behind our strategic growth target. We aim to further improve our operational performance to drive growth. Our goal is also to increase the number of chargeable personnel, which is slightly easier than before in the prevailing market situation. During the review period, the number of personnel at Innofactor increased by 9.5 percent year-on-year. We also look for acquisition targets to enable inorganic growth.

The operating margin (EBITDA) was 10.7 percent of net sales (2022: 10.3%). EBITDA for the review period increased by 19.7 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. We aim to further enhance our operational performance to improve profitability.

Innofactor’s operating cash flow for the review period January 1–September 30, 2023, amounted to EUR 3.5 million (2022: EUR 3.0 million) and the equity ratio at the end of the review period was 46.3 percent (2022: 43.7 percent). Innofactor’s strong operating cash flow supports the company’s strategic goal of profitable growth and securing a solid financial standing in all situations.

Espoo, October 24, 2023


Board of Directors

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

Briefings concerning the Interim Report for January 1–September 30, 2023
Innofactor will publish the Interim Report for January–September 2023 on Tuesday, October 24, 2023, at approximately 9:00 Finnish time.

A video conference in English concerning the interim report will be held for media, investors and analysts on the same day at 10:30 Finnish time. The report will be presented by CEO Sami Ensio.

Please register for the briefing in advance by sending an e-mail to

The presentation materials will be available on Innofactor’s website after the briefing.

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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 and public sector. Innofactor has the widest solution offering and leading know-how in the Microsoft ecosystem in the Nordics. Innofactor has about 600 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