DIGIA'S GROWTH CONTINUES, PROFITABILITY IMPROVES
DIGIA PLC HALF YEAR FINANCIAL REPORT, 1 JANUARY - 30 JUNE 2016, 12 AUGUST 2016 AT 8:00 AM
DIGIA'S GROWTH CONTINUES, PROFITABILITY IMPROVES
Digia Plc and Qt Group Plc's demerger came into force on 1 May 2016. This half year financial report presents the business operations of Digia Plc, the former domestic business (continuing operations). Qt Group's business operations are treated in the half year financial report as discontinued operations; in addition to Qt's net profit, the reported figures include the demerger expenses and the difference between the fair values and carrying amounts of net assets transferred to Qt.
The comparison figures provided in parentheses in this report always refer to the corresponding period of the previous year, unless stated otherwise.
April-June 2016:
- Net sales EUR 22.4 (20.5) million, up 9.3 per cent
- Operating profit EUR 1.8 (1.7) million, representing 7.9 (8.1) per cent of net sales
- Earnings per share EUR 0.07 (0.07)
- Earnings per share of discontinued operations EUR 3.64
January-June 2016:
- Net sales EUR 43.8 (39.9) million, up 9.9 per cent
- Operating profit EUR 2.7 (1.9) million, representing 6.2 (4.8) per cent of net sales
- Earnings per share EUR 0.11 (0.08)
- Earnings per share of discontinued operations EUR 3.65
Digia's net sales continued to grow during the second quarter of 2016. In January-June, year-on-year growth amounted to 9.9 per cent. The trend in net sales was supported particularly by growth in the ERP business based on the company's own technologies, the customised solutions service business, integration business and financial-sector software solutions business in Finland.
In January-June, the operating margin also improved, rising to 6.2 per cent as compared with 4.8 per cent in the corresponding period of the previous year.
After the demerger of Digia and Qt came into force on 1 May 2016, Digia's new growth strategy aims to strengthen the company’s position, particularly in the growing markets for digital services, process digitalisation and the service business. Digia is a visionary partner to its customers in modernising and developing business processes. The company wants to grow at a significantly faster pace than the IT market and seeks average annual growth of 15 per cent during the strategy period. Growth is sought both organically and inorganically.
During the second quarter, Digia agreed on the acquisition of Igence Oy Ab, a webshop expert. With this acquisition, Digia expanded its current offering and expertise, especially in solutions for webshops and commercial product data management. Igence's technological expertise complements Digia's services excellently. By combining Igence's expertise with Digia's strong competence in service design and integration and deep knowledge of processes and background systems, Digia will create webshop solutions for its customers that are practical in day-to-day operations and integrated into background systems. The acquisition was carried out on 1 July 2016 and is reported as part of Digia as from that date.
Digia reiterates its earlier guidance, estimating that demand will remain reasonable and net sales will continue to grow during the rest of 2016. The company expects that in 2016 the operating margin will remain on a par with the previous year.
GROUP KEY FIGURES
| EUR 1,000 | 4-6/2016 | 4-6/2015 | Change,% | 1-6/2016 | 1-6/2015 | Change,% | 2015 |
| Continuing operations | |||||||
| Net sales | 22,397 | 20,489 | 9.3% | 43,829 | 39,888 | 9.9% | 80,946 |
| Operating profit | 1,777 | 1,653 | 7.5% | 2,714 | 1,914 | 41.8% | 5,854 |
| - % of net sales | 7.9% | 8.1% | 6.2% | 4.8% | 7.1% | ||
| Net profit | 1,542.8 | 1,554 | -0.7% | 2,242 | 1,604 | 39.7% | 4,246 |
| - % of net sales | 6.9% | 7.6% | 5.1% | 4.0% | 4.8% | ||
| Net profit, discontinued operations | 75,646 | 104 | 75,771 | 326 | 981 | ||
| Net profit, continuing and discontinued operations, total | 77,189 | 1,658 | 78,013 | 1,930 | 5,228 | ||
| Return on equity, % | 15.3% | 17.9% | 11.2% | 10.4% | 13.5% | ||
| Return on investment, % | 15.9% | 18.0% | 12.4% | 12.4% | 15.6% | ||
| Interest-bearing liabilities | 12,228 | 15,229 | -19.7% | 12,228 | 15,229 | -19.7% | 13,513 |
| Cash and cash equivalents | 1,752 | 4,842 | -63.8% | 1,752 | 4,842 | -63.8% | 6,710 |
| Net gearing, % | 33.9% | 27.5% | 33.9% | 27.5% | 16.6% | ||
| Equity ratio, % | 50.6% | 51.8% | 50.6% | 51.8% | 53.7% | ||
| Earnings per share, EUR, undiluted | 0.07 | 0.07 | 0.11 | 0.08 | 0.20 | ||
| Earnings per share, EUR, diluted | 0.07 | 0.07 | 0.11 | 0.08 | 0.20 |
APPLICATION OF NEW ESMA GUIDELINES
Digia Plc has adjusted the terms used in its financial reporting in accordance with the new guidelines on Alternative Performance Measures (APM) issued by the European Securities and Markets Authority (ESMA).
INVITATION TO THE BRIEFING ON THE HALF YEAR FINANCIAL REPORT
Digia will hold a briefing on this half year financial report for analysts on Friday, 12 August 2016 at 11:00 am, in the Bulsa cabinet of Hotel Scandic Simonkenttä, Simonkatu 9, 00100 Helsinki, Finland. Welcome.
FURTHER INFORMATION
Timo Levoranta, CEO, tel. +358 (0)10 313 3000 (exchange)
The half year financial report and presentation will be available in the Investors section at www.digia.com from 11 am on 12 August 2016.
DISTRIBUTION
NASDAQ Helsinki
Key media
www.digia.com