Digia's CEO Timo Levoranta
Last updated: 9.8.2019
“Digia’s net sales growth continued in the second quarter in line with our expectations. Second-quarter net sales amounted to EUR 32.8 (28.9) million, year-on-year growth of 13.5 per cent. First-half net sales increased by 16.0 per cent year-on-year to EUR 64.6 (55.7) million. Organic growth in the second quarter amounted to 8.0 per cent and in the first half to 8.9 per cent. After the end of the review period, we acquired the entire share capital of Accountor Enterprise Solutions Oy (AES) on 1 August 2019. AES specialises in Microsoft Dynamics 365 and Oracle NetSuite solutions. AES posted net sales of EUR 12.7 million in 2018 and the company had 101 employees at the end of the year.
Our profitability continued to improve. Operating profit was EUR 2.9 (1.9) million in the second quarter and EUR 4.9 (3.5) million in January-June. Operating profit was 8.8 (6.7) per cent of net sales in the second quarter and 7.5 (6.3) per cent in January-June. Our profitability has been improved by our determined efforts to develop our service offering, organisation and operating methods. I am especially pleased that, as our customer projects move into the maintenance phase, we can offer our customers an even wider range of services for the continuous development of the solutions we provide and expansion of customer cooperation. We have substantially bolstered our ability to serve as an end-to-end solution provider to our customers in recent years. With respect to the first part of the year, I am also pleased that our cash flow from operations improved to EUR 8.4 (-1.2) million.
Net sales in the review period were increased especially by good demand for online business, integrations and software interface (API) services as well as for Microsoft ERP systems and business analytics. Data utilisation is playing a greater role in business, boosting demand for analytics, integrations and core business systems. In networked business, the seamless compatibility of systems and service packages is vital. The organisational change we implemented in the first months of the review period and the development of our operating models bolstered our ability to implement such end-to-end solutions. In line with plans, we have harnessed the expertise of Starcut Oy, a specialist in mobile app development and cloud services that we acquired in the first quarter, and demand for these services has been as strong as expected.
Demand in the financial sector has remained good. Changes in its operating environment create demand for technological solutions that enable new services and operating models as well as boost efficiency in the automation of functions. New technical solutions are also needed to respond to changing regulatory requirements.
The service and maintenance business grew by 13 per cent in January-June and accounted for 49.2 (50.4) per cent of net sales. In the service and maintenance business, we focused on both expertise and monitoring technologies. Development focused on creating a more comprehensive operational overview of customer environments and utilisation of data from them. By analysing data, we can anticipate the maintenance needs of platforms and systems even more effectively, for instance. The project business accounted for 50.8 (49.6) per cent of net sales.
Our R&D expenditure amounted to EUR 2.8 million during the review period. The most important development focuses were our ERP system, mobile communications and monitoring products.
Skilled personnel who are committed to the objectives of our customers are the cornerstone of all our operations. We want to be a team of top professionals who are always learning and are both highly skilled and flexible. During the review period, our number of personnel grew by 53 and was 1,124 on average. We proactively develop our culture and employee experience to provide our experts with the best possible framework to succeed in their work. During the review period, we put our heads together to define the four core principles of our culture: learning, sharing, courage and professional pride. Professional skill and passion for continuous learning are the basis on which we build our future. At the same time, we see our work as meaningful for society as a whole. At Digia, we believe in a world in which value is created in ecosystems through smart data management.”
Digia Plc's half year financial report 2019, August 9 2019
President & CEO