Solteq Plc’s Financial Statements Bulletin January 1 – December 31, 2020

Thu, Feb 25, 2021 07:00 CET

Solteq Plc Stock Exchange Bulletin February 25, 2021 at 8.00 am

Company performed very well in a changed market situation

October–December

Comparable revenue totaled EUR 16,408 thousand (15,009) and revenue EUR 16,408 thousand (15,708).
Comparable EBITDA was EUR 3,320 thousand (1,927) and EBITDA EUR 3,080 thousand (4,387).
Comparable operating profit was EUR 2,027 thousand (867) and operating profit EUR 1,787 thousand (3,328).
Earnings per share was EUR 0.03 (0.11).
The comparable revenue was 9.3 percent higher than in the comparison period, while revenue grew by 4.5 percent.

January–December

Comparable revenue totaled EUR 60,452 thousand (55,293) and revenue EUR 60,452 thousand (58,291).
Comparable EBITDA was EUR 10,810 thousand (6,582) and EBITDA EUR 10,380 thousand (9,714).
Comparable operating profit was EUR 5,780 thousand (2,579) and operating profit was EUR 5,350 thousand (5,711).
Earnings per share was EUR 0.10 (0.15).
Solteq Group’s equity ratio was 35.5 percent (32.0).
Net cash flow from operating activities was EUR 6,302 thousand (4,128).
The comparable revenue was 9.3 percent higher than in the comparison period, while revenue grew by 3.7 percent.
The company will continue to invest in future growth by focusing on the development of its own cloud-based software products and services. As development investments are commercialized, the company’s annual product development investments account for 10–15 percent of the Software segment’s revenue. During the financial year, product development investments amounted to EUR 3.0 million (3.9). Investments to product development during 2021 are expected to be approximately EUR 2.5 million.
Solteq Group’s revenue is expected to grow clearly and operating profit to improve.
The Board of Directors proposes a dividend of EUR 0.15.

Key figures

	10-12/2020	10-12/2019	Change %	1-12/2020	1-12/2019	Change %

Revenue, TEUR	16,408	15,708	4.5	60,452	58,291	3.7
Comparable revenue, TEUR	16,408	15,009	9.3	60,452	55,293	9.3
EBITDA, TEUR	3,080	4,387	-29.8	10,380	9,714	6.9
Comparable EBITDA, TEUR	3,320	1,927	72.3	10,810	6,582	64.2
Operating profit, TEUR	1,787	3,328	-46.3	5,350	5,711	-6.3
Comparable operating profit, TEUR	2,027	867	133.7	5,780	2,579	124.1
Profit for the financial period, TEUR	622	2,049	-69.6	1,980	2,803	-29.4
Earnings per share, EUR	0.03	0.11	-69.6	0.10	0.15	-29.4
Operating profit, %	10.9	21.2		8.9	9.8
Comparable operating profit, %	12.4	5.8		9.6	4.7
Equity ratio, %				35.5	32.0

CEO Olli Väätäinen: Company performed very well in a changed market situation

Solteq Group’s comparable revenue grew clearly and the improvement in profit was significant. Solteq Group’s comparable revenue was EUR 60.5 million – when the absence of the SAP ERP business is taken into account – up by 9.3 percent. The Group’s comparable operating profit was EUR 5.8 million, up by 124.1 percent year-on-year. The comparable operating profit margin was 9.6 percent. The company’s comparable EBITDA increased by 64.2 percent year-on-year to EUR 10.8 million. Solteq Group’s comparable EBITDA margin was 17.9 percent.

Effective from the beginning of the year, the new segmentation restructured the company into two business segments: Solteq Software (software business) and Solteq Digital (services business). The Software segment accounted for about a third and the Digital segment about two thirds of the Group’s revenue. Both segments performed well, as expected. Revenue from international subsidiaries accounted for 20.6 percent of consolidated revenue, which – due to the COVID-19 pandemic – was slightly below expectations.

Solteq Software business grew during the financial year. The segment’s long-term financial goal is to grow by at least 20 percent a year. Success was driven by Utilities business area with its order intake of EUR 22 million. Solteq Digital performed consistently well, thanks to the customer orders secured prior to the pandemic. Investments in the company’s product development amounted to around EUR 3 million.

The company monitored and assessed the impact of the COVID-19 pandemic on its business throughout the year. The pandemic had only minor negative impact in Finland, mainly affecting customer projects in the travel, service, and leisure sectors. The organization’s operational capacity and the safety of its stakeholders were ensured by measures adopted in the early stages of the pandemic.

The company issued a new bond on October 1, 2020, using the assets obtained to redeem a bond that would have matured on July 1, 2021. A new, fixed-rate and unsecured senior bond worth EUR 23.0 million was admitted to public trading on Nasdaq Helsinki Ltd on October 5, 2020. The company used the new bond to secure its long-term financing and going concern.

Solteq Group’s business outlook is good both in Finland and internationally. Driven by the Utilities business, Solteq Software is expected to continue its upward growth trend. The business outlook for Solteq Digital is expected to remain stable despite the pandemic. The digital reality is affecting everyone. Keeping up with the latest developments is therefore on the current and future agendas of companies of different sizes and in various sectors.

Profit guidance 2021

Solteq Group’s revenue is expected to grow clearly and operating profit to improve.

Attachments

Solteq Plc Financial Statements Bulletin January 1 – December 31, 2020

Further information

CEO Olli Väätäinen
Tel: +358 50 557 8111
E-mail: olli.vaatainen@solteq.com

CFO Kari Lehtosalo
Tel: +358 40 701 0338
E-mail: kari.lehtosalo@solteq.com

Distribution

NASDAQ OMX Helsinki
Key media
www.solteq.com

About Solteq

Solteq is a Nordic provider of IT services and software solutions specializing in the digitalization of business and industry-specific software. The key sectors in which the company has long term experience include retail, industry, energy and services. The company operates in Finland, Sweden, Norway, Denmark, Poland and the UK and employs 600 professionals.