Innofactor Plc’s Half-Yearly Report for January 1–June 30, 2024
(IFRS)
Innofactor Plc Half-Yearly Report July 18, 2024, at 9:00 Finnish
time
In a challenging market situation, Innofactor fell short
of its targets in the second quarter, and profitability was also
significantly further reduced by legal expenses.
April–June 2024 in brief:
- Net sales were approximately EUR
19.9 million (2023: 20.1), representing a decrease of 1.1%
- The operating
margin was approximately EUR 0.6 million (2023: 1.8), representing
a decrease of 65.8%
- The operating
margin includes legal expenses of approximately EUR 0.75 million,
without which the operating margin would have amounted to EUR 1.4
million and the comparable change would have been a decrease of
23.2%
- Operating profit
was EUR -0.1 million (2023: 1.0), representing a decrease of 114.5%
- The operating
profit includes the corresponding legal expenses as the operating
margin, without which the operating profit would have been
approximately EUR 0.6 million and the comparable change would have
been a decrease of 38.2%
- The order backlog
at the end of the review period was EUR 70.4 million (2023: 77.3),
representing a decrease of 8.9%
January–June 2024 in brief:
- Net sales were approximately EUR
41.1 million (2023: 40.3), representing an increase of 1.8%
- The operating
margin was approximately EUR 3.2 million (2023: 4.3), representing
a decrease of 24.6%
- The operating
margin includes legal expenses of approximately EUR 0.75 million,
without which the operating margin would have amounted to EUR 4.0
million and the comparable change would have been a decrease of
7.0%
- Operating profit
was EUR 1.7 million (2023: 2.7), representing a decrease of 37.2%
- The operating
profit includes the corresponding legal expenses as the operating
margin, without which the operating profit would have been
approximately EUR 2.4 million and the comparable change would have
been a decrease of 9.3%
Key figures of the group,
IFRS
|
Apr
1–Jun 30, 2024 |
Apr
1–Jun 30, 2023 |
Change |
|
Jan
1–Jun 30, 2024 |
Jan
1–Jun 30, 2023 |
Change |
Net sales, EUR
thousand |
19,866 |
20,095 |
-1.1% |
|
41,052 |
40,317 |
1.8% |
Revenue in the
previous period |
20,095 |
16,946 |
|
|
40,317 |
33,911 |
|
Growth of net
sales |
-1.1% |
18.6% |
|
|
1.8% |
18.9% |
|
Operating
result before depreciation and amortization (EBITDA), EUR
thousand |
604 |
1,765 |
-65.8% |
|
3,204 |
4,252 |
-24.6% |
percentage of
net sales |
3.0% |
8.8% |
|
|
7.8% |
10.5% |
|
Operating
profit/loss (EBIT), EUR thousand |
-143 |
984 |
-114.5% |
|
1,693 |
2,695 |
-37.2% |
percentage of
net sales |
-0.7% |
4.9% |
|
|
4.1% |
6.7% |
|
Earnings
before taxes, EUR thousand |
-202 |
813 |
-124.9% |
|
1,541 |
2,124 |
-27.4% |
percentage of
net sales |
-1.0% |
4.0% |
|
|
3.8% |
5.3% |
|
Earnings, EUR
thousand |
-343 |
459 |
-174.8% |
|
1,034 |
1,496 |
-30.8% |
percentage of
net sales |
-1.7% |
2.3% |
|
|
2.5% |
3.7% |
|
Order
backlog |
70,355 |
77,250 |
-8.9% |
|
70,355 |
77,250 |
-8.9% |
Net
gearing |
24.6% |
46.6% |
-22.0% |
|
24.6% |
46.6% |
-22.0% |
Net gearing
without IFRS 16 |
15.2% |
30.5% |
-15.3% |
|
15.2% |
30.5% |
-15.3% |
Equity
ratio |
51.0% |
46.6% |
4.4% |
|
51.0% |
46.6% |
4.4% |
Equity ratio
without IFRS 16 |
53.6% |
50.4% |
3.2% |
|
53.6% |
50.4% |
3.2% |
Active
personnel on average during the review period* |
587 |
584 |
0.5% |
|
583 |
576 |
1.2% |
Active
personnel at the end of the review period* |
591 |
588 |
0.5% |
|
591 |
588 |
0.5% |
Earnings per
share (EUR) |
-0.01 |
0.01 |
-174.8% |
|
0.03 |
0.04 |
-30.8% |
*) 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 2024
Innofactor’s net sales and operating margin (EBITDA) in 2024 are
estimated to increase from 2023, during which net sales were EUR
80.3 million and the operating margin was EUR 9.1 million.
CEO Sami Ensio’s review: In spite of the challenging
market situation, we managed to increase our order backlog when
compared to the previous quarter
Net sales in the second quarter of 2024 amounted to EUR 19.9
million, representing a year-on-year decrease of 1.1 percent.
During the second quarter, net sales increased in Finland and
Norway, but decreased in Sweden and Denmark. The operating margin
(EBITDA) decreased by 65.8 percent year-on-year to EUR 0.6 million
(3.0 percent of net sales), and was positive in Finland. The
operating margin includes legal expenses of approximately EUR 0.75
million, without which the operating margin would have amounted to
EUR 1.4 million and the comparable change would have been a
decrease of 23.2%.
Net sales in the first half of 2024 amounted to EUR 41.1
million, representing a year-on-year increase of 1.8 percent. In
the first half of the year, net sales increased in Finland and
Norway, but decreased in Sweden and Denmark. The operating margin
(EBITDA) decreased by 24.6 percent year-on-year to EUR 3.2 million
(7.8 percent of net sales), and was positive in Finland and Norway.
The operating margin includes legal expenses of approximately EUR
0.75 million, without which the operating margin would have
amounted to EUR 4.0 million and the comparable change would have
been a decrease of 7.0%.
The market situation remained difficult in the second quarter of
2024. New sales were challenging during the second quarter. The
order backlog at the end of the review period was EUR 70.4 million,
representing a year-on-year decrease of 8.9 percent. However, the
order backlog increased by 2.2 percent when compared to the first
quarter of the year. Our invoicing rate fell short of our target
due to the challenging demand situation.
Innofactor wants to maintain its competitiveness when demand
eventually turns to growth again. In our tendering activities, we
have not priced our services below our cost. We are adapting our
operations with a conservative approach. We have reduced the use of
subcontracting, especially in Finland and Sweden. In the second
quarter, we also reduced the number of our personnel by
approximately 20 percent in Sweden, where profitability has been
weak for an extended period of time and the challenging market
situation has further exacerbated the situation. This resulted in
expenses in the second quarter, but that will no longer be the case
in the second half of the year.
According to a decision handed down by the arbitration tribunal
of the Stockholm Chamber of Commerce, Innofactor Plc will not be
able to collect the previously awarded damages of approximately EUR
2.3 million in relation to the 2016 Lumagate acquisition to the
full extent of the awarded damages. Instead, Innofactor Plc's
distribution share will be approximately EUR 1 million at a
maximum. In addition to this, Innofactor Plc will bear its own
legal costs of approximately EUR 309,000, the opposing party’s
legal costs of approximately EUR 310,000 and the costs of the
arbitration, EUR 166,150. These expenses were recognised in full in
the second quarter, and there should be no further costs related to
the matter.
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 Value Proposition: 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 the first half of the year amounted to
EUR 41.1 million (2023: 40.3), representing year-on-year growth of
1.8 percent. The prevailing weak market situation makes the net
sales growth target challenging at present. Innofactor aims to
continue to take measures to support stronger net sales growth
going forward.
The operating margin (EBITDA) was 7.8 percent of net sales
(2023: 10.5%). In the period under review, the operating margin
decreased by 24.6 percent year-on-year. The operating margin
includes legal expenses of approximately EUR 0.75 million, without
which the operating margin would have amounted to EUR 4.0 million
and the comparable change would have been a decrease of 7.0%. While
profitability has improved over the long term, continued attention
and efforts by the management are still needed in the coming years
to reach the long-term operating margin target of approximately 20
percent.
Innofactor’s operating cash flow for the review period January
1–June 30, 2024, amounted to EUR 5.5 million (2023: EUR 3.9
million) and the equity ratio at the end of the review period was
51.0 percent (2023: 46.6 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.
The amount of interest-bearing liabilities has decreased
considerably. At the end of the review period, the company's
interest-bearing liabilities to financial institutions amounted to
only approximately EUR 4.0 million, consisting entirely of current
liabilities.
Espoo, July 18, 2024
INNOFACTOR PLC
Board of Directors
Additional information:
CEO Sami Ensio, Innofactor Plc
tel. +358 50 584 2029
sami.ensio@innofactor.com
Briefings concerning the Half-Yearly Report for January
1–June 30, 2024
Innofactor will publish its Half-Yearly Report for January–June
2024 on Thursday, July 18, 2024, at approximately 9:00 Finnish
time.
A briefing in Finnish concerning the Half-Yearly Report will be
held for media, investors and analysts on the same day at 10:00
Finnish time, at the company’s premises at Keilaranta 9, Espoo. The
report will be presented by CEO Sami Ensio. The corresponding video
conference in English will be held at 12 noon Finnish time. The
report will be presented by CFO Antti Rokala.
Please register for the briefing in advance by sending an e-mail
to ir@innofactor.com.
The presentation materials will be available on Innofactor’s
website after the briefing.
Distribution:
NASDAQ Helsinki
Main media
www.innofactor.com
Innofactor
Innofactor is the leading driver of the modern digital organization
in the Nordic Countries for its about 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. www.innofactor.com #ModernDigitalOrganization
#PeopleFirst #CreatingSmiles #BeTheRealYou
- Innofactor Plcs Half Yearly Report for January 1 - June 30 2024
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