CEO's review

 

Last updated: 8.2.2019

Digia’s President and CEO Timo Levoranta 

 

“Digia net sales continued to grow robustly in the last quarter of 2018, in keeping with our goals. Our Q4 net sales increased by 13.6%, to EUR 31.2 (27.4) million. Our net sales for the year increased by 18.6%, to EUR 112.1 (94.5) million. I am particularly pleased with the organic growth of our net sales, which stood at 12.4%.  Strong growth was seen in the Integration and Information Management service area, and in digital services. The Incomes Register project implemented with the Tax Administration also supported net sales growth. Demand for ERP and financial sector systems remained steady during the entire year.

The operating profit for Q4 amounted to EUR 1.4 (1.2) million, which was 4.6 (4.2) per cent of net sales. Q4 operating profit was impacted by additional resourcing for a major customer project in order to ensure its successful implementation. In 2018, our profitability for the whole year improved substantially. The operating profit was EUR 6.5 (1.9) million, which was 5.8 (2.0) per cent of net sales. The profitability of the Integration and Information Management service area and digital services saw particularly favourable development in 2018. Profitability development measures in 2018 focused on project management and enhancing and harmonizing the efficiency of operating methods. Profitability enhancement actions will continue in 2019. 

The service and maintenance business grew by 13 per cent in 2018 and rose to 50.7 (47.8) per cent of net sales. The project business accounted for 49.3 (52.2) per cent of net sales. Growth in the service and maintenance business was supported by both new service agreements and greater use of continuous services by our customers.

Digital solutions are becoming an increasingly important part of the core business of our customers, and this trend firmly supports Digia’s future growth potential. The focus of development is shifting from the implementation of separate, isolated projects towards the controlled renewal of business operations as a whole, involving the modernisation of the entire IT infrastructure of the company, from its back-end systems to state-of-the-art e-services and their integration. Also, our customers are building business platforms linked to an increasing number of external information systems.

In accordance with our strategy, we continued to reinforce our overall offering with complementary corporate acquisitions. In March, we acquired Avarea Oy, which specialises in advanced analytics solutions. Thanks to this acquisition, Digia can provide its customers with a unique and comprehensive offering for data analytics, artificial intelligence and necessary background integrations. In the course of the year, we also augmented our ERP systems offering by acquiring Mavisystems Oy, which specialises in Microsot Dynamics ERP systems and in CRM solutions.

Skilled and motivated personnel are the cornerstone of all our operations. We offer our employees a wide range of interesting jobs in IT services along with potential for career development and learning at work. During the review period, our number of personnel grew by 86.

In addition, we restructured Digia’s organisation in the fourth quarter. This restructuring aims to further boost the cost-effectiveness of operations and enhance our capabilities to serve our customers better in the future market for digital ecosystems and data utilisation. Our new organisation came into force on 1 January 2019. 

In 2018, we strengthened our position in several service areas in the Finnish IT services market. We developed and expanded our offering and fine-tuned our service portfolio to improve its effectiveness. Our efforts in 2018 laid the groundwork for successful further business development in 2019. Our objective for 2019 is to keep growing at a faster pace than the IT service market while improving our operating profit.”


Digia Plc’s Financial Statement Bulletin 2018, 8 February 2019

President & CEO Timo Levoranta

Timo Levoranta
President & CEO

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