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ENDigia Plc Half Year Financial Report 2017: Net sales growth accelerates to 11 per cent in the second quarter
Digia Plc
Half Year Financial Report
11 August 2017 at 8:00
Digia Plc Half Year Financial Report 2017
Net sales growth accelerates to 11 per cent in the second quarter
April-June 2017
- Net sales EUR 24.8 (22.4) million, increase 10.9%
- Operating result EUR 1.4 (1.8) million, 5.5% (7.9%) of net sales
- Earnings per share EUR 0.05 (0.07)
January-June 2017
- Net sales EUR 47.4 (43.8) million, increase 8.0%
- Operating result EUR 1.4 (2.7) million, 3.0% (6.2%) of net sales
- Earnings per share EUR 0.05 (0.11)
- Rights issue generates gross proceeds of about EUR 12.5 million
- Digia's guidance for 2017 remains unchanged: Digia's net sales growth is expected to accelerate in 2017 (2016: net sales up 6.8%). Operating profit in 2017 is estimated to remain on a par with the previous year.
KEY FIGURES
| EUR 1,000 | 4-6/ 2017 | 4-6/ 2016 | Change % | 1-6/ 2017 | 1-6/ 2016 | Change % | 2016 |
| Net sales | 24,840 | 22,397 | 10.9% | 47,356 | 43,829 | 8.0% | 86,463 |
| Operating result | 1,374 | 1,777 | -22.7% | 1,441 | 2,714 | -46.9% | 5,419 |
| - as a % of net sales | 5.5% | 7.9% | 3.0% | 6.2% | 6.3% | ||
| Result for the period | 1,050 | 1,543 | -32.0% | 961 | 2,242 | -57.1% | 4,064 |
| - as a % of net sales | 4.2% | 6.9% | 2.0% | 5.1% | 4.7% | ||
| Return on equity, % | 5.0% | 12.0% | 11.0% | ||||
| Return on investment, % | 5.5% | 13.1% | 11.0% | ||||
| Interest-bearing liabilities | 16,959 | 12,228 | 38.7% | 13,686 | |||
| Cash and cash equivalents | 13,630 | 1,752 | 678.0% | 1,994 | |||
| Net gearing, % | 7.5% | 33.9% | 35.6% | ||||
| Equity ratio, % | 52.3% | 50.6% | 49.8% | ||||
| Employees, end of period | 973 | 791 | 23.1% | 872 | |||
| Employees, average | 960 | 781 | 22.9% | 928 | 775 | 19.7% | 810 |
| Total shareholders' equity | 44,217 | 30,911 | 43.0% | 32,814 | |||
| Balance sheet total | 84,830 | 61,586 | 37.7% | 66,390 | |||
| Earnings per share | 0.05 | 0.07 | -32.3% | 0.05 | 0.11 | -57.2% | 0.20 |
DIGIA'S PRESIDENT AND CEO TIMO LEVORANTA COMMENTS ON THE SECOND QUARTER OF 2017
"The trend in Digia's net sales developed positively. Second-quarter net sales saw year-on-year growth of 10.9 per cent. Growth was boosted by good demand for e-commerce solutions and the acquisition of Omni Partners Oy, a digital services company. The national Income Register project that Digia is implementing with the Tax Administration also contributed to Digia's net sales growth. Outlays on growth are in line with our strategy.
Digia's operating result was EUR 1.4 million and its EBIT% stood at 5.5 per cent. Profitability was impacted by restructuring and acquisition of EUR 0.3 million as well as investments in growth and recruitment. Our operating result was also impacted by several challenging projects and the investments they required. However, their impact was clearly lower than in the first quarter. June was a good month for both net sales and operating result.
In order to implement our growth strategy, we continued to recruit new experts and also acquired Omni Partners to bolster our expertise in digital services, especially with respect to tailored, open source-based online services as well as service design. 52 people joined Digia as a result of the acquisition. Digia employed 973 people at the end of June, which is 101 more employees than at the end of 2016.
Our customers have a strong need to harness the opportunities afforded by digitalisation in their businesses. We expect that the market will develop favourably during 2017 in comparison to the previous year. Demand for software as a service continues to become ever more commonplace. This model will reduce the cyclicity of business operations and changes the structure and scheduling of income flows, as a result of which one-off licence fees will account for a smaller relative share and income will accumulate over a longer period.
Digia has a strong offering to support the digitalisation of our customers' business operations. We work every day to earn our position as a visionary partner to our customers in the development of their business operations. Our strength is our Digia team, which consists of expert and constantly developing professionals. We offer solutions for service design and development, as well as for integration and back-end systems. Customers reap the benefits of digitalisation only when the service package has been seamlessly integrated all the way into their back-end systems.
We are continually strengthening our offering and working with our customers to develop their businesses. One of the emerging customer needs is preparing for the requirements of the revised General Data Protection Regulation (GDPR). We have developed our offering to meet this customer need as well.
During 2017, we will continue to develop our competence structure. Our goal is to strengthen the company's position, particularly in the growing markets for digital services, process digitalisation and the service business, as well as to accelerate the growth of net sales and boost efficiency to improve the profitability of our operations."
BRIEFING INVITATION
Digia will hold a briefing for analysts on Friday 11 August 2017 at 11 am, in the Freda cabinet at Hotel Scandic Simonkenttä, Simonkatu 9, 00100 Helsinki, Finland. Welcome.
The material and presentation for the event will be available from about 11 am on 11 August 2017 in the Investors section of the company's website: www.digia.com/en/investors/reports-and-presentations.
FURTHER INFORMATION
President & CEO Timo Levoranta, tel. (exchange) +358 (0)10 313 3000
DISTRIBUTION
Nasdaq Helsinki
Key media
www.digia.com
Digia is a profitably growing IT service company that helps its customers harness digital opportunities. As a visionary partner, Digia develops and innovates solutions that support business operations together with its customers. We adapt our expertise to their specific industries to help them develop digital services, manage operations and utilise information. We operate in Finland and Sweden with our team of nearly 1,000 experts. We are expanding our international presence together with our customers. Digia's net sales in 2016 totalled EUR 86.5 million. The company is listed on NASDAQ Helsinki (DIGIA). www.digia.com
Digia is a software and service company that combines technological possibilities and human capabilities to build intelligent business, society and a sustainable future. Our mission is to ensure that our customers are at the forefront of digital evolution. There are more than 1,500 of us working at Digia and we operate globally with our international customers. Digia’s turnover in 2023 was EUR 192,1 million. The company is listed on Nasdaq Helsinki (DIGIA).