Nixu Corporation's Half-Year Financial Report 2020: Growth of +14% During Challenging Times
Stock Exchange Release on August 13, 2020 at 8:30 AM EEST
This release is a summary of the Nixu Corporation’s January 1 – June 30, 2020 Half-Year Financial Report. The complete report is attached to this release as a pdf-file. It is also available on the company website at https://www.nixu.com/H12020.
Highlights for January–June 2020
- Revenue: EUR 29,218 thousand (25,685), change +14%. Organic growth: +5%. Managed continuous services grew by +37% representing 18% of revenue.
- EBITDA: EUR 147 thousand (1,975), share of revenue: 1% (8%).
- Adjusted EBITDA: EUR 999 thousand (2,054), share of revenue: 3% (8%).
- EBIT: EUR -978 thousand (1,036), share of revenue: -3% (4%).
- Nixu initiated reorganization of its operations and a cost reduction program across Nixu Corporation to prepare for the impact of COVID-19 pandemic.
- Nixu signed a new credit facility of EUR 4 million for the next two years. The credit facility was not in use during the review period.
Financial Guidance for 2020
On April 23, 2020, Nixu announced that it withdrew its financial guidance for 2020 for the time being due to the global COVID-19 pandemic. Forecasting the business remains very challenging in this situation. The financial guidance will be issued when the company is in a better position to assess the extent of the coronavirus pandemic's impact on its business.
|EUR thousand||1 Jan-30 Jun 2020||1 Jan-30 Jun 2019||1 Jan-31 Dec 2019|
|Profit/loss for the period||-1,370||488||-3,518|
|Earnings per share (EUR)||-0.18||0.07||-0.48|
|EBITDA, % of net sales||0.5 %||7.7 %||2.0 %|
|Adjusted EBITDA, % of net sales1||3.4 %||8.0 %||3.0 %|
|EBIT, % of net sales||-3.3 %||4.0 %||-5.1 %|
|Adjusted EBIT %1||-0.4 %||4.3 %||-4.2 %|
1Adjustment items are material items outside the ordinary course of business, which costs related to reorganization and business combinations. January-June 2020 EBITDA included the non-recurring costs EUR 852 (78) thousand.
|EUR thousand||30 Jun 2020||30 Jun 2019||31 Dec 2019|
|Equity ratio, %||33.9 %||43.0 %||37.3 %|
|Net interest-bearing debt||2,538||8,223||6,988|
|Net gearing, %||17.9 %||42.9 %||45.4 %|
Reconciliation of alternative performance measures
1 Jan-30 Jun 2020
|1 Jan-30 Jun 2019||1 Jan-31 Dec 2019|
|+Costs related to reorganization and business combinations||852||78||478|
|+Costs related to reorganization and business combinations||852||78||478|
|=Adjusted operating result||-126||1,115||-2,150|
The figures presented in the half-year financial report have not been audited.
Petri Kairinen, CEO of Nixu:
This past spring demonstrated the possibilities of digitalization and, in particular, the crucial role digital services play in modern society. As the COVID-19 pandemic spread and various lockdown measures were put into place, remote work and online services often became the only avenues for people to handle their work and daily affairs. In this type of situation, it is absolutely vital for service providers to ensure the availability of their services. In terms of cybersecurity, our Nixuans supported our clients in this task, in line with our mission to keep the digital society running. We were successful in ensuring the availability of our services and handling our daily operations remotely, and this is set to continue for the foreseeable future.
Our clients reacted to the pandemic in many ways. Some of our clients increased their purchases and accelerated their projects, while others decided to hold back on their purchases and cancel their projects. In my opinion, when we assess what we have achieved during this situation, our current financial result is satisfactory. Our revenue grew by 14% and EBITDA was positive despite non-recurring items caused by the cost reduction program. After the onset of the pandemic, our main objectives were to ensure the continuity of our business and adequacy of our financial situation. In terms of cash management, we were successfully able to improve our financial position to an excellent degree. This was achieved by various means, for example with a new, 4-million-euro credit facility, which we did not need to take into use.
In May, we launched a cost reduction program that resulted in the termination of the employment of some Nixu employees, in addition to which several other employees were temporarily laid off or went on extended vacation as our client work situation continued to fluctuate. The main objective of the cost reduction program was to secure our profitability in the fall, as we cannot make any iron-clad predictions while the pandemic is gaining new ground in Nixu’s market areas and around the world in general. I believe that we are now well-prepared for the fall and the uncertainty that this period may bring. I also believe that we are in a good position to serve our clients and their ever-increasing need for cybersecurity.
COVID-19 differs from other recessions in that our clients are still, for the most part, continuing their digitalization projects, even if they might be shortsightedly cutting back on their cybersecurity spend. I believe that this debt will need to be paid back at some point in the future, and this will be reflected in the growing need for cybersecurity services. In addition, several of our clients discovered new needs that are related to the pandemic, and we tailored a new set of solutions to these during the spring. We were also able to attract a commendable number of new orders.
From the perspective of Nixu’s international operations, as our clients continue to operate remotely and become more used to virtual customer service, this also provides us with an excellent opportunity to intensify the cooperation between our different international markets. This will allow us to utilize the competitive advantage that a large and holistic selection of services can provide even in those markets where Nixu is not yet the largest cybersecurity provider locally.
Based on the actions that we have taken, I can look forward to the future with confidence. I would also like to thank Nixu’s employees for understanding the seriousness of this current situation and the actions we have taken, and for their resilience in these exceptional times where we must all strive together remotely.
Financial Reporting in 2020
Nixu revised its Disclosure Policy during the review period. The main changes, that came into force on June 1, 2020, relate to the silent period and English as an official language for communications. Previously, the silent period was twice a year before the publication of the Financial Statements and Half-Year Financial Report. Currently, the silent period begins at least 30 calendar days before the publication of full-year and half-year results as well as the quarterly (Q1 and Q3) revenue information. The company’s investor communications languages are Finnish, and as of June 1, 2020, also English.
The Q3/2020 CEO’s review and revenue information will be published on October 13, 2020.
Nixu will organize a revenue briefing for analysts, investors and the media on August 13, 2020 at 9:30 AM EEST as a webcast. The live webcast will be available at https://nixu.videosync.fi/2020-q2-results.
Attachment: Nixu Half-Year Financial Report 2020
CEO Petri Kairinen, Nixu Corporation
Telephone: +358 40 832 1832, e-mail: firstname.lastname@example.org
Nixu in Brief:
Nixu is a cybersecurity services company on a mission to keep the digital society running. Our passion is to help organizations embrace digitalization securely. Partnering with our clients we provide practical solutions for ensuring business continuity, an easy access to digital services and data protection. We aim to provide the best workplace to our team of over 400 cybersecurity professionals with a hands-on attitude. With Nordic roots we serve enterprise clients worldwide. Nixu shares are listed on the Nasdaq Helsinki stock exchange.