Innofactor Plc’s Interim Report for January 1–March 31, 2024 (IFRS)

Innofactor Plc Interim Report April 23, 2024, at 9:00 Finnish time

Innofactor increased its net sales in the first quarter of 2024 in spite of the continued challenging market situation

January–March 2024 in brief:

• Net sales were approximately EUR 21.2 million (2023: 20.2), representing an increase of 4.8%
• The operating margin was approximately EUR 2.6 million (2023: 2.5), which shows an increase of 4.6%
• Operating profit was EUR 1.8 million (2023: 1.7), representing an increase of 7.3%
• The order backlog at the end of the review period was EUR 68.8 million (2023: 76.3),
  representing a decrease of 9.8%

Key figures of the group, IFRS
.	Jan 1–Mar 31, 2024	Jan 1–Mar 31, 2023	Change
Net sales, EUR thousand	21,186	20,223	4.8%
Growth of net sales	4.8%	19.2%
Operating result before depreciation and amortization (EBITDA), EUR thousand	2,601	2,487	4.6%
percentage of net sales	12.3%	12.3%
Operating profit/loss (EBIT), EUR thousand	1,836	1,712	7.3%
percentage of net sales	8.7%	8.5%
Earnings before taxes, EUR thousand	1,743	1,311	33.0%
percentage of net sales	8.2%	6.5%
Earnings, EUR thousand	1,378	1,036	32.9%
percentage of net sales	6.5%	5.1%
Order backlog	68,819	76,293	-9.8%
Net gearing	19.2%	33.1%	-13.9%
Net gearing without IFRS 16	8.8%	16.4%	-7.5%
Equity ratio	53.9%	47.3%	6.7%
Equity ratio without IFRS 16	57.1%	51.3%	5.8%
Active personnel on average during the review period*	579	567	2.1%
Active personnel at the end of the review period*	583	572	1.9%
Earnings per share (EUR)	0.04	0.03	32.9%

*) Innofactor Group monitors the number of active personnel. The number of active personnel does not include employees who are on leave for more than three months.

Innofactor’s future outlook for 2024

Innofactor’s net sales and operating margin (EBITDA) in 2024 are estimated to increase from 2023, during which net sales were EUR 80.3 million and the operating margin was EUR 9.1 million.

CEO Sami Ensio’s review: We continue to adapt our operations due to the continued challenging market situation

Net sales in the first quarter of 2024 amounted to EUR 21.2 million, representing year-on-year growth of 4.8 percent. The operating margin (EBITDA) increased by 4.6 percent year-on-year to EUR 2.6 million (12.3 percent of net sales), and was positive in Finland and Norway. The order backlog at the end of the quarter amounted to EUR 68.8 million, representing a year-on-year decrease of 9.8 percent.

In accordance with our previous assessment, the market situation remained challenging in the first quarter of 2024. New sales were challenging during the first quarter, but we were successful in our sales activities particularly with regard to the extensions of existing customer accounts. Our invoicing rate fell short of our target due to the challenging demand situation.

We are confident that the market conditions will improve and we want to maintain our competitiveness when demand turns to growth again. In our tendering activities, we have not priced our services below our cost. We are adapting our operations with a conservative approach. We have reduced, and continue to reduce, the use of subcontracting, especially in Finland and Sweden. In the second quarter, we will reduce the number of our personnel by approximately 20 percent in Sweden, where profitability has been weak for an extended period of time and the challenging market situation has further exacerbated the situation.

Innofactor’s aim is to be the leading provider of organizations’ digital transformation in each of the Nordic countries. We believe in our chosen Nordic strategy and in reaching our long-term goals. This requires perseverance and determination from the company's management and employees as well as investors. Innofactor is still actively looking for new strategic partnerships in the Nordic countries. The Group’s goal is to grow both organically and through acquisitions.

Strategy and its realization in the review period

Innofactor’s strategy comprises our purpose, mission, vision, strategic choices, values, working principle, and long-term financial goals.

Our purpose: Innovating to make the world work better

Our mission: Driving the modern digital organization

Our vision: Leading Nordic digital transformation partner in the Microsoft ecosystem

Our strategic choices:

• The most competent Nordic teams
• Productized and specialized offering
• Proactive and agile way of working
• Innovation with top customers

Our values:

• Accountability
• Empowerment
• Innovation
• Customer

Our working principle: Our principle is to put people first in everything we do. We want to provide solutions that make our customers’ everyday work and life run smoothly and bring a smile to their faces.

Employer Value Proposition: Be the real you

Our long-term financial goals:

• To achieve annual growth of about 20 percent, the majority of which is intended to be achieved by organic growth
• To achieve about 20 percent EBITDA in relation to the net sales
• To keep the cash flow positive and secure good financial standing in all situations.
  
  

Innofactor’s net sales in the first quarter amounted to EUR 21.2 million (2023: 20.2), which shows an increase of 4.8 percent compared to the previous year. Achieving the net sales growth target is challenging at present due to the prevailing weak market situation. Innofactor aims to continue to take measures to support stronger net sales growth going forward.

The operating margin (EBITDA) was 12.3 percent of net sales (2023: 12.3%). In the period under review, the operating margin increased by 4.6 percent year-on-year. Profitability has remained at the previous level, and attention and efforts by the management are needed to reach the long-term target of approximately 20 percent.

Innofactor’s operating cash flow for the review period January 1–March 31, 2024, was EUR 4.4 million (2023 Q1: EUR 3.9 million) and the equity ratio at the end of the review period was 53.9 percent (2023: 47.3 percent). Innofactor's high equity ratio and strong operating cash flow supports the company’s strategic goal of profitable growth and securing a solid financial standing in all situations.

Espoo, April 23, 2024

INNOFACTOR PLC

Board of Directors

Additional information:
CEO Sami Ensio, Innofactor Plc
tel. +358 50 584 2029
sami.ensio@innofactor.com

Briefings concerning the Interim Report for January 1–March 31, 2024

Innofactor will publish its Interim Report for January–March 2024 on Tuesday, April 23, 2024, at approximately 9:00 Finnish time.

A briefing in Finnish concerning the Interim Report will be held for media, investors and analysts on the same day at 10:00 Finnish time, at the company’s premises at Keilaranta 9, Espoo. The report will be presented by CEO Sami Ensio. The corresponding video conference in English will be held at 12 noon Finnish time. The report will be presented by CFO Antti Rokala.

Please register for the briefing in advance by sending an e-mail to ir@innofactor.com.

The presentation materials will be available on Innofactor’s website after the briefing.

Distribution:
NASDAQ Helsinki
Main media
www.innofactor.com

Innofactor
Innofactor is the leading driver of the modern digital organization in the Nordic Countries for its over 1,000 customers in commercial and public sector. Innofactor has the widest solution offering and leading know-how in the Microsoft ecosystem in the Nordics. Innofactor has about 600 enthusiastic and motivated top specialists in Finland, Sweden, Denmark and Norway. The Innofactor Plc share is listed in the technology section of the main list of NASDAQ Helsinki Oy. www.innofactor.com #ModernDigitalOrganization #HybridWork #PeopleFirst #CreatingSmiles

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• Innofactor Plc's Interim Report for January 1–March 31, 2024 (IFRS)

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