AVIDLY’S HALF-YEAR REPORT 1 JAN–30 JUN 2019: Avidly´s revenue grew significantly, investments in growth initiatives ate into profits

AVIDLY’S HALF-YEAR REPORT 1 JAN–30 JUN 2019: Avidly´s revenue grew significantly, investments in growth initiatives ate into profits 

Avidly Plc, half-year report (unaudited), 22 Aug 2019, at 8:30 am

This company announcement is a summary of Avidly’s January–June 2019 half-year financial report. The complete half-year financial report is attached to this announcement as a pdf file. It is also available on the company website at https://investors.avidlyagency.com/en/company-news.

In line with its strategy, Avidly’s revenue grew significantly during the first half of the year, with the inbound business, in particular, growing strongly. In March, Avidly strengthened its inbound expertise in Finland with the acquisition of Hehku Marketing. Due to investments in growth initiatives, Avidly’s profit for the first half of 2019 was negative.

January–June 2019

• Revenue was EUR 11,781 thousand (9,670), an increase of 21.8%.

• Gross profit was EUR 9,415 thousand (6,942), an increase of 35.6%. Continuous services amounted to approximately 33% (39%) of gross profit.

• EBITDA was EUR 428 thousand (531), a decrease of 19.4%.

• The Group’s operating profit was EUR -299 thousand (352), i.e. -2.5% of revenue (3.6%).

• Operating profit of Marketing Services was EUR 116 thousand (281), including a one-time cost of EUR 98 thousand connected to employee co-operation negotiations concluded in February.

• Operating profit of Inbound Marketing was EUR -415 thousand (71) due to investments in growth initiatives, and operating profit adjusted for acquisition costs was EUR -349 thousand (71).

• Profit for the period was EUR -428 thousand (199), i.e. -3.6% of revenue (2.1%).

• Earnings per share were EUR -0.18 (0.14).

Outlook for 2019 (unchanged, published on 25 June 2019)

Avidly estimates that its revenue for 2019 will be EUR 22–24 million (revenue in 2018: EUR 19.8 million), along with a positive EBIT (EBIT in 2018: EUR 0.6 million).

Mikko Marttinen, interim CEO:

During the first half of 2019, our revenue and gross profit increased significantly. Revenue increased by 22% and gross profit by 36%, but our operating profit was clearly negative due to investments in growth initiatives.

In January, we published a new growth strategy and finalised the funding needed to implement the strategy. Our strategy is based on two strong cornerstones: substantially growing our HubSpot-based services in existing markets in Finland and the Nordic countries (Inbound Marketing), and developing Avidly as a full service marketing agency throughout Finland (Marketing Services).

To implement our strategy, we invested heavily in growing our Inbound Marketing business: in Finland, we strengthened our expertise by acquiring the inbound marketing company Hehku Marketing in March. We also recruited 27 new inbound specialists in the Nordic region. These investments had a negative impact on our operating profit, but we believe that the operating loss of the Inbound Marketing business will decrease significantly during the second half of the year and be close to zero at year-end.

The Marketing Services business was impacted by the ending of the outsourcing contract with the Finnish retail company SOK, which related mainly to marketing material production. However, we believe that the demand for continuous marketing services will increase in the future, and we closed several new contracts during the first half of the year. Avidly wants to offer comprehensive marketing services to its customers throughout Finland, and we opened our 12th office in Kuopio after the end of the reporting period. We continuously develop our processes, and we estimate that the changes made during spring 2019 and the recruitments aimed at supporting our customers’ growth in this business area will show in our profit in the second half of the year.

The recent recruitments and other investments in growth initiatives provide us with an excellent basis on which to continue implementing our strategy, and we believe that our profit will improve significantly during the second half of the year.

Key figures 1–6 1–6 1–12
EUR 1,000 2019 2018 2018
Revenue 11,781 9,670 19,770
Gross profit 9,415 6,942 15,327
EBITDA 428 531 1,047
Operating result (EBIT) -299 352 616
Profit before taxes -419 263 256
Personnel, average 229 170 195
Earnings/share, EUR -0.18 0.14 0.22
Equity ratio, % 50.9% 32.6% 50.4%
ROI, % -4.9% 5.5% 6.2%
Equity/share, EUR 3.65 2.49 3.73
Gearing, % 25.7% 25.5% -14.7%
Number of outstanding shares, weighted average during the period 2,364,718 1,400,131 1,585,980
Number of outstanding shares, at the end of the period 2,416,560 1,492,760 2,239,560

Financial information

Avidly publishes its half-year financial report for January–June 2019 on the company website at https://investors.avidlyagency.com/en/company-news. You can also find the report attached to this announcement.

Avidly’s next financial report is estimated to be published on 5 March 2020 and annual report, including financial statements, on 12 March 2020.

Helsinki, 22 August 2019



Additional information

Mikko Marttinen, interim CEO, CFO, tel. +358 50 581 7669

Oaklins Merasco Oy acts as Avidly Plc’s Certified Advisor, tel. +358 9 6129 670

Avidly is Finland’s leading marketing service provider and a leading marketing automation company in the Nordics, listed on the Nasdaq First North marketplace in Helsinki. We create an atmosphere for growth to take our customers forward. We are a team of more than 230 navigators and explorers, makers and shakers in 14 locations in Finland, Sweden, Norway and Denmark. Read more: investors.avidlyagency.com/en