LDAAS REVENUE GROWING STEADILY – DECREASE IN PRIVACY RELATED ASSIGNMENTS AND INTERNATIONALIZATION WEAKENED THE RESULT AS EXPECTED

Fondia Plc Press Release 29 August 2019 at 11.30 

Unless otherwise stated, the figures in parentheses refer to the corresponding period of the previous year. Jansson & Norin AB, acquired by Fondia during the financial period is reported as a part of Fondia as from 1.2.2018.

January–June 2019 in brief:

  • Net sales of 10.8 million (10.7), growth +1.0 %.
  • Recurring monthly invoicing accounted for 46 % of net sales (42%)
  • Operating profit (EBIT) was 0.7 million (1.6). Operating profit margin was 6.1 % (15.1).
  • Profit for the period was 0.5 million (1.3)
  • The company's internationalization progressed in line with its strategy. The integration started in connection with the acquisition of Jansson & Norin progressed as planned. The new Managing Director of the company’s Swedish subsidiary, Monica Söderlund started in her position on 10 June 2019.
  • In the Baltic operations, the Lithuanian subsidiary, which was opened in the beginning of the financial year, started operations in accordance with the strategy.
  • Average number of staff (Full Time Equivalents) increased by 14.8%, enabling the Group to expand internationally and to expand its LDaaS customer base.

KEY FIGURES   

Fondia Group    1–6/2019   1–6/2018   Change, %   1–12/2018  
Net sales, 1 000 euros   10 804    10 696   1,0   20 244  
Operating profit (EBIT), 1 000 euros   657    1 617   -59.4   2 138  
     % net sales                                        6.1   15.1   10.6  
Profit for the period, 1 000 euros   478   1 261    -62.1   1 618  
     % of net sales  4.4   11.8    8.0   
Net gearing %   -86.9   -89.6    -95.2   
Equity ratio %              57.6   57.8    58.7   
Earnings (ROE) %   7.2   18.9   23.6  
Balance sheet total, 1 000 euros   10 960   11 720   12 153   
Net earnings per share, euros  0,12   0,32   0,41  
Average number of staff (FTE*)   140                      122    14,8 126

 * In order to refine its reporting, in the future company reports not only the number of employees (HC), but also the Full-time Equivalents (FTE). The difference in figures in the company is influenced by, among other things, part-time legal trainees, employees on family and study leaves, and other part-time employees.

   

 * In order to refine its reporting, in the future company reports not only the number of employees (HC), but also the Full-time Equivalents (FTE). The difference in figures in the company is influenced by, among other things, part-time legal trainees, employees on family and study leaves, and other part-time employees.

FONDIA’S CEO, LEENA HELLFORS: BUILDING ON THE STRONG FOUNDATION CONTINUES

Our recurring LDaaS service increased by 12.7% in the first half of 2019, while our individual assignment based sales decreased by 13.7%. The comparative period of 2018 was particularly strong as it was significantly affected by a particularly large number of data protection assignments due to the EU General Data Protection Regulation (GDPR) (approximately 0.8 million). Despite the steady growth in LDaaS revenue, our overall revenue growth was frail and we cannot be completely satisfied with our profitability. In addition to revenue development, our results for the first half of the year were weighed down by the increase in number of personnel at the end of 2018, which contribute to the development in LDaaS revenue and the operational and commercial expansion of operations in Sweden and the Baltic countries. At the end of the review period, the growth in the number of personnel leveled off and customer assignments were more evenly distributed among employees.

Over the past two years, Fondia has experienced changes related to the strong growth of its business and personnel and the acquisition of Jansson & Norin. The changes have had an impact on the organizations’ ability to operate and therefore we are now focusing on securing the basic operational performance. In response to strong staff growth and internationalization, we are further sharpening our management model and streamlining our operations, while maintaining our unique corporate culture and flat organization. Thanks to similar corporate cultures and hard work, the integration of Jansson & Norin has progressed well. In addition to the Swedish operations, internationalization in line with our strategy is progressing well in the Baltic countries.

We believe that these actions will improve our profitability and enable future growth towards our goals. By focusing this year on our core business and our ten (10) strategic key projects, we will be laying the foundation for the years ahead. We will continue to invest in our digitalization project, where we have already achieved tangible results and which will create efficiency for our core business and open up new business opportunities and scalability in the future. We continue to cherish Fondia's startup spirit, where we test on low-threshold new technologies and develop service concepts in an agile and customer-centric way.

The unaudited and unofficial version of the report can be found attached. 

About Us

Fondia is a full service law firm founded in 2004 and a forerunner in exploiting new service models and technologies in the legal field. Fondia is a proudly different legal service provider with Legal Department as a Service, LDaaS as their main product. Whereas the traditional legal firms ordinarily provide hourly-based case services, Fondia offers productized service concepts that customers can purchase in accordance with their needs with a fixed price. Fondia has managed to create new ways of purchasing legal services and exploit digital operation environments in their services models. Fondia has already over 200 LDaaS partners and over 160 employees. The Fondia HQ is located in Helsinki and the other offices are in seven other Finnish cities and Stockholm, Gothenburg, Tallinn and Vilnius.

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