Digia Plc Financial Statement Bulletin 2021

A strong fourth quarter – full-year net sales rise by 12.1% with an EBITA margin of 11.4%

October–December 2021

• Net sales: EUR 44.8 (37.9) million, up 18.2 per cent
• Operating profit (EBITA): EUR 5.0 (4.6) million, up 7.8 per cent; EBITA margin: 11.1 (12.1) per cent of net sales
• Operating profit: EUR 4.2 (4.1) million, up 3.8 per cent; operating margin: 9.4 (10.7) per cent of net sales
• Earnings per share: EUR 0.13 (0.11)
• Share buyback programme started 16 December

January–December 2021

• Net sales: EUR 155.9 (139.0) million, up 12.1 per cent
• Operating profit (EBITA): EUR 17.7 (16.0) million, up 10.9 per cent; EBITA margin: 11.4 (11.5) per cent of net sales
• Operating profit: EUR 14.7 (14.1) million, up 4.1 per cent; operating margin: 9.4 (10.1) per cent of net sales
• Earnings per share: EUR 0.44 (0.40)
• Return on investment: 16.3 (16.5) per cent
• Equity ratio: 48.0 (50.7) per cent
• Acquisition of Climber International AB and Solasys Oy
• Major investments: Availability and scalability of competence, future working environment and Digia Business Engine, and cloud capabilities
• Digia’s Board of Directors will propose to the Annual General Meeting that a dividend of EUR 0.17 per share be paid (EUR 0.15 per share in 2020).
• Profit guidance for 2022: Digia’s net sales will grow year-on-year and its EBITA margin will be over 10 per cent of net sales.

Unless otherwise stated, the comparison figures provided in parentheses refer to the corresponding period of the previous year.

Group key figures

CEO’s Review

“I’m very pleased with our strong growth and good profitability in the last quarter – especially since at the same time we continued to invest in increasing our future competitiveness. Our net sales were up 18.2 per cent in October-December and amounted to EUR 44.8 million. Net sales growth gained momentum in the second half of the year compared to the first. In July-December, our net sales grew by 15.8 per cent to EUR 78.0 million. Our full-year net sales grew by 12.1 per cent to EUR 155.9 million. It is a positive and encouraging development that almost all of our business units increased their net sales in the last quarter.

The fourth-quarter EBITA margin fell slightly short of the comparison period, but was at a good level of 11.1 per cent. The full-year EBITA margin was almost unchanged at 11.4 per cent. 

Demand for our own key products – Digia Enterprise and Digia Financial Systems – remained steady throughout the fiscal year. In 2021, our cooperation with S-Bank Fund Management in the outsourcing of its fund functions expanded to cover private equity fund management processes, for instance. In December, we signed an agreement with the Savings Banks Group under which Digia will provide the Group with a savings and investment service package consisting of a system based on the Digia Financial Systems product family, service management and selected back-office functions. 

In the second half of the year, customers’ need to develop and renew their business operations remained evident in demand. In our view, there are growing needs in digital business, knowledge-based management, business continuity and efficiency. As a result, Digia’s net sales grew by more than 40 per cent in the fourth quarter in both knowledge-based management solutions and Microsoft ERP and CRM solutions. Climber, the Swedish business analytics group we acquired early in the year, has also developed in line with our expectations. During the last quarter, we bolstered our position as a leading integration provider and announced customer agreements with DigiFinland Oy and Valtori. Integrations are at the heart of data-based management and networked digital business.

In the fourth quarter, our service and maintenance business generated about 64 (62) per cent of net sales, and the project business about 36 (38) per cent. The service and maintenance business accounted for 67 per cent and the project business for 33 per cent of full-year net sales. Our ongoing service and maintenance business brings stability to our net sales – in addition, our wide-ranging expertise and long customer relationships provide a good basis for growth. The result of Digia’s customer satisfaction survey improved once again in 2021.

It testifies to our strong expertise and extensive offering that Digia was selected as Microsoft’s Smart Business Solutions / Dynamics 365 Partner of the Year in July. The main reasons for their choice were our strengths in providing wide-ranging service to our customers by combining Azure cloud, Dynamics technology and analytics utilisation with our extensive industry and development expertise. In addition, Microsoft selected Digia as a member of the Microsoft Business Applications 2021/2022 Inner Circle partner network as the only Finnish company. Microsoft honoured Digia due to our achievements last year, commitment to customers and innovations around Microsoft cloud services.

Fourth-quarter operating profit (EBITA) totalled EUR 5.0 (4.6) million, with an EBITA margin of 11.1 (12.1) per cent of net sales. Our full-year operating profit (EBITA) totalled EUR 17.7 (16.0) million, with an EBITA margin of 11.4 (11.5) per cent of net sales. In the comparison year, our travel, meeting and office work expenses were lower than usual, while in the fiscal year now ended we invested heavily in our business platform and management system, Digia Business Engine, further building up our capabilities in cloud platform solutions and recruitment. 

At the end of the year, we stepped up our ability to scale our expertise to customer projects by agreeing on a new cooperation model with the U.S. company Fulcrum Digital. With this agreement, Digia will be utilising Fulcrum Digital’s offshore professionals in its customer projects going forward. Digia and Fulcrum Digital have worked together in the past already, but the new agreement deepens the partnership and makes it more systematic. Shared values and corporate responsibility commitments also play an important role.

In addition to our own expertise, we already harness our Digia Hub network in our customer projects – at the end of the review period, more than 80 Digia Hub experts worked on Digia customer projects through this network. Also, 132 subcontractors worked in our projects alongside our own professionals. Our personnel at period-end amounted to 1,339. Surveys indicate that Digia’s employee experience developed favourably in 2021 as well.

We announced the updated priorities and objectives of our corporate responsibility in early 2021. In the autumn, we built Digia’s climate roadmap to reduce emissions. Our own operations have been carbon neutral since 2020 and our objective is to be carbon neutral throughout our entire value chain by 2030.

2022 is the last year of Digia’s 2020–2022 strategy period. Our key individual modernisation project during this period involves the deployment of Digia’s own business platform and management system, Digia Business Engine. This project is an investment in Digia’s future competitiveness, as it renews our operations by combining technological possibilities with human expertise. In early 2022, we will increase the intensity of our development work and proceed to deploy the platform in phases. The deployment project will still affect our result in early 2022.

Digia expects to see further growth in the Finnish IT service market over the long term, even though the coronavirus pandemic will continue to generate uncertainty in our operating environment. Harnessing technology is a key tool in business renewal in both the public and private sectors. This trend remains strong. Our customers’ needs dovetail into three main areas: digital business, knowledge-based management, and operational continuity and efficiency. Digia’s offering and competence profile are a good match for this demand.  Together with our customers, we build shared growth stories.

Profit guidance for 2022

Profit guidance for 2022: Digia’s net sales will grow year-on-year and its EBITA margin will be over 10 per cent of net sales.

Briefing invitation

A briefing for analysts will be held at 4:00 pm on Friday, 8 February 2022 as a Teams meeting. Attendance instructions have been emailed to participants.

The material and presentation for the event will be available from 4:00 pm on 8 February 2022 on the company’s website: digia.com/en/investors/reports-and-presentations.

Financial Statements and Annual Report 2021

Digia Plc’s 2021 Annual Report will be published in digital format on 24 February 2022 on the company’s website: digia.com/en/investors/reports-and-presentations.

The Report of the Board of Directors and the Financial Statements for 2021 will be published as part of the Annual Report.

For further information, please contact:

President & CEO Timo Levoranta, tel. (exchange) +358 (0)10 313 3000

Distribution

Nasdaq Helsinki
Key media
digia.com

Digia is a software and service company that helps its customers renew themselves in the networked world. There are more than 1,300 of us working at Digia. Our roots are in Finland and we operate both in Finland and abroad. We are building a world in which digitalisation makes a difference – together with our customers and partners. Digia’s net sales totalled EUR 156 million in 2021. The company is listed on Nasdaq Helsinki (DIGIA). digia.com 

Digia_Financial Statement Bulletin_2021.pdf