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Digia Plc Half Year Financial Report 2017: Net sales growth accelerates to 11 per cent in the second quarter

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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