Solteq Plc Interim Report 1 January – 30 September 2017
We want to simplify the digital world to make a better tomorrow
Brief look at January – September 2017
- Revenue was 45.5 million euros (45.3 million euros).
- Operating profit was 343 thousand euros (5,742 thousand euros).
- Adjusted operating profit was 1,734 thousand euros (2,209 thousand euros).
- Group’s equity ratio was 34,3% (32,4 %).
- Earnings per share was -0,05 euros (0,26 euros).
- Our mission is to make a better tomorrow by simplifying the digital world.
- As a strategic alignment, we are continuing on the path of profitable growth and internationalisation. Nevertheless, some policies are further defined to help reach our strategic objective. Solteq is an expert in digital customer engagement in industries where the foundations are being shaken by the digital disruption.
- The drop in expected adjusted operating profit for the review period was a result of some large clients transitioning into a maintenance phase, investing in our Swedish operations and the growth of subcontracting expenses. During the review period we have done restructuring of our business and operations. This will have a positive effect on our business development in the future.
- Solteq Groups current interim period’s adjusted operating profit is expected to be positive, but the adjusted operating profit for financial year 2017 is expected to decrease compared to the year 2016.
Key figures and ratios
|Revenue, TEUR||14,242||13,570||5.0 %||45,466||45,345||0.3 %||63,049||63,170|
|Operating profit, TEUR||-496||7||-7185.7 %||343||5,742||-94.0 %||6,444||1,045|
|Adjusted operating profit, TEUR||-116||603||-119.2 %||1,734||2,209||-21.5 %||3,114||2,639|
|Profit for the financial period, TEUR||-804||-485||65.8 %||-972||4,394||-122.1 %||4,612||-754|
|Operating profit-%||-0.04||-0.03||33.3 %||-0.05||0.26||-119.2 %||0.26||-0.05|
|Adjusted operating profit||-3.5||0.1||-3580.0 %||0.8||12,7||-93.7 %||10.2 %||1.7 %|
|Equity ratio, %||-0.8||4.4||-118.5 %||3.8||4.9||-22.2 %||4.9 %||4.2 %|
Olli Väätäinen, CEO of Solteq: We want to simplify the digital world to make a better tomorrow
During my more than six months as Solteq's CEO, my vision of the path of profitable growth and internationalisation has grown stronger. We are experts in digital customer engagement. Our mission is to simplify the digital world to make a better tomorrow.
The drop in expected adjusted operating profit for the review period was a result of some large clients transitioning into a maintenance phase, investing in our Swedish operations and the growth of subcontracting expenses.
Last year we took our first step for growth in the Nordic countries by purchasing Aponsa AB in Sweden, who provides IT services for retail business. We merged our existing Swedish operations with Aponsa at the start of the current quarter. Sweden accounts for some ten percent of our current net sales. Over the coming years, we expect strong growth from our business in Sweden. This year we have invested almost one million euros into developing and growing the Swedish business. While the year has so far been unprofitable for us in Sweden, the last quarter is expected to turn a decent profit.
We changed the organizational structure of our business in Q3 to serve our customers more effectively and ensure that our range of products and services reaches all customer segments. Active adjustment of the cost structure and operational improvement are an integral part of our business. The structural changes made in the last six months, as well as the savings in personnel costs and other operating costs, have allowed us to reach an annual cost level that is three million euros lighter than what we had at the start of the year. Our financial statements will not show the full savings due to the corporate acquisitions that have changed the cost structure. The cost cutting has mostly been focused on administrative and non-invoicing positions, as well as reducing the costs of infrastructure and business service procurement.
The development of our proprietary software products and services has continued as previously stated. We have been particularly active in areas where we can integrate artificial intelligence and robotics into our products and services. We will be activating approximately 250 thousand euros in product development investments in the third quarter.
Our business has a solid foundation in the skills and competencies of Solteq employees. We have already broken the news that we will be recruiting 100 new employees in 2017. We believe that we will achieve this as planned.
Guidance on Group outlook
Solteq will change its 2017 guidance on Group outlook: Solteq Group’s current interim period’s adjusted operating profit is expected to be positive, but the adjusted operating profit for financial year 2017 is expected to decrease compared to the year 2016.
Previous guidance on Group outlook: Solteq Group’s adjusted operating profit is expected to grow compared to financial year 2016.
Online-briefing about the interim report will not be broadcasted
The online-briefing about interim report will not be broadcasted October 26th, 2017 unlike earlier communicated.
The estimated release date of the financial statements bulletin
Solteq Plc. estimates that it will release its financial statements bulletin from the financial year 2017 on February 16th, 2018 at 8.00.
Olli Väätäinen, CEO
tel. +358 50 5578 111
Antti Kärkkäinen CFO
tel. +358 40 8444 393
NASDAQ OMX Helsinki
Solteq in brief
Solteq is a Nordic IT provider and software house that specialises in digital customer engagement. We are the partner to our customer, who knows what it takes to win in digital disruption. We offer comprehensive solutions for both business enhancement by means of digitalisation and for omnicommerce: from back end processes all the way to the customer’s purchasing experience and from supply chain management to digital marketing. Over 500 experts, who work in three countries, develop and implement solutions for clients in Europe, North America, Asia and Australia.