Fondia Plc: Business Review January–March 2024 - growth continued unevenly

Fondia Plc

Company release

25.4.2024 at 8.30 a.m. EEST

The company complies with the Securities Markets Act half-yearly reporting and publishes business reviews for the first three and nine months of the year, presenting key information on the company’s financial performance. The financial information presented in this Business Review is unaudited.

Financial development in January–March 2024

Outlook for 2024 (unchanged)

Fondia expects growth, with net sales for 2024 of EUR 27–29 million and an operating profit of 7–10%. The market situation remains uncertain, and this has weakening impact on the ability to assess future business development and the factors affecting it. 

CEO Harri Savolainen:

"In the early part of the year, we have continued to develop the customer experience and to manage our operations for results, in addition to providing high-quality customer service and employee well-being. Our goal is to ensure not only good customer and employee experience, but also profitable growth and the development of commercial capabilities by leveraging technology and sharpening our operations.

In January–March, Group net sales grew by 6.8% compared to the comparison period. In the reporting period, net sales grew by 11.6% in Finland and 45.6% in the Baltics compared to the comparison period. In Sweden, net sales decreased by 13.1% compared to the comparison period. The Group's net sales growth in the reporting period was helped by the positive turnaround in the volume of customer work in Finland and the Baltics last autumn. In addition, the Group's good sales continued and contributed to the growth in net sales, although sales did not yield adequately in Swedish net sales. In Sweden, some of our customers had to adjust their operations by reducing their Legal Department Service (LDaaS) resource reservations at the end of the last financial year, which is now reflected in our net sales development in the reporting period.

The Group's operating profit margin (EBIT %) for January–March was 7.1% (5.4). The development of the operating profit margin for the reporting period was strengthened, in addition to the growth in the Group’s total net sales, by the emphasized cost management during the period. On the other hand, the operating profit margin was weighed down by the decrease in net sales in Sweden and general cost inflation.

In the reporting period, we sharpened our operational management to ensure profitability development and better manage the impact of cost inflation. We also launched a harmonised and updated brand image to mark the 20th anniversary of our company. Following the launch of AI Lawyer, which uses AI and a large language model, we moved on to the implementation of Microsoft Copilot (AI) during the reporting period. Our aim is to utilize AI in customer work and thereby increase value for our customers already in the current year. Following the launch of the Legal Health Check and Fondia Insights functionalities on the MyFondia platform, we focused on the development of the Legal Review and Legal Plan functionalities during the reporting period. These are expected to support customer work already after the summer. The MyFondia platform aims to create a single digital service channel and experience.

In addition to the economic challenges and increased security threats, the reporting period was notable for the exceptionally high tensions in the Finnish labour market. It is still too early to assess their impact on the market. In the Swedish and Baltic markets, part of our growth challenge is not only the uncertain economic situation but also the low awareness of our company. Despite the challenges in the operating environment, we continued to develop largely in the right direction during the reporting period, both operationally and partly in terms of results. We will continue the journey of change we have started and continue to focus on the things and actions that are relevant to the business: legal customer work, sales, value creation for customers and employee well-being, and improving the profitability of the business.

We will closely monitor possible changes in the market situation. When necessary, we respond quickly to changes as appropriate, without compromising the quality of our customer service or the good customer and employee experience. Despite the market uncertainty, we are confident about the start of the financial year."

Investor communications

Fondia will publish the Business Review January–March 2024 on April 25, 2024, at 8.30 a.m. EEST. The Business Review and a video of the CEO’s presentation as well as the presentation material will be available later on the company’s website www.fondia.com/investors.

An investor call will be held on Thursday April 25, 2024, at 10.00 a.m. EEST. The investor call will be held in Finnish and can be accessed online by registering on the company’s website www.fondia.com/investors.

For further information, please contact:

Group CEO Harri Savolainen

tel. +358 40 502 1919

Certified Adviser Aktia Alexander Corporate Finance Ltd

tel. +358 50 520 4098

Fondia in brief:

Fondia solves the legal needs of companies by combining the best services from internal legal departments and law firms. Fondia operates in Finland, Sweden, Estonia, and Lithuania, and the Group’s net sales in 2023 were EUR 26.1 million. Fondia employs over 190 people. 

www.fondia.com  

Distribution: 

Nasdaq Helsinki Ltd 
Key media