Digia Plc’s Financial Statement Bulletin 2018

Digia Plc
Financial Statement Bulletin
8 February 2019 at 8:00 am

Digia Plc’s Financial Statement Bulletin 2018

Net sales for the year increased 18.6%, and the operating profit improved substantially, to EUR 6.5 million.

Unless otherwise stated, the comparison figures provided in parentheses always refer to the corresponding period of the previous year.

October-December

• Net sales EUR 31.2 (27.4) million, up 13.6 per cent
• Operating profit EUR 1.4 (1.2) million, 4.6 (4.3) per cent of net sales
• Earnings per share EUR 0.04 (0.03)

January-December

• Net sales EUR 112.1 (94.5) million, up 18.6 per cent. Organic growth 12.4 per cent
• Operating profit EUR 6.5 (1.9) million, 5.8 (2.0) per cent of net sales
• Earnings per share EUR 0.18 (0.04)
• Return on investment 10.6 (3.7) per cent
• Equity ratio 54.9 (51.0) per cent
• Digia’s Board of Directors proposes the payment of a dividend of EUR 0.07 per share (EUR 0.04 per share in 2017).
• Profit guidance for 2019: Digia's net sales will continue to grow and operating profit will improve compared to 2018.

GROUP KEY FIGURES

PRESIDENT & CEO TIMO LEVORANTA

“Digia net sales continued to grow robustly in the last quarter of 2018, in keeping with our goals. Our Q4 net sales increased by 13.6%, to EUR 31.2 (27.4) million. Our net sales for the year increased by 18.6%, to EUR 112.1 (94.5) million. I am particularly pleased with the organic growth of our net sales, which stood at 12.4%. Strong growth was seen in the Integration and Information Management service area, and in digital services. The Incomes Register project implemented with the Tax Administration also supported net sales growth. Demand for ERP and financial sector systems remained steady during the entire year.

The operating profit for Q4 amounted to EUR 1.4 (1.2) million, which was 4.6 (4.2) per cent of net sales. Q4 operating profit was impacted by additional resourcing for a major customer project in order to ensure its successful implementation. In 2018, our profitability for the whole year improved substantially. The operating profit was EUR 6.5 (1.9) million, which was 5.8 (2.0) per cent of net sales. The profitability of the Integration and Information Management service area and digital services saw particularly favourable development in 2018. Profitability development measures in 2018 focused on project management and enhancing and harmonizing the efficiency of operating methods. Profitability enhancement actions will continue in 2019.

The service and maintenance business grew by 13 per cent in 2018 and rose to 50.7 (47.8) per cent of net sales. The project business accounted for 49.3 (52.2) per cent of net sales. Growth in the service and maintenance business was supported by both new service agreements and greater use of continuous services by our customers.

Digital solutions are becoming an increasingly important part of the core business of our customers, and this trend firmly supports Digia’s future growth potential. The focus of development is shifting from the implementation of separate, isolated projects towards the controlled renewal of business operations as a whole, involving the modernisation of the entire IT infrastructure of the company, from its back-end systems to state-of-the-art e-services and their integration. Also, our customers are building business platforms linked to an increasing number of external information systems.

In accordance with our strategy, we continued to reinforce our overall offering with complementary corporate acquisitions. In March, we acquired Avarea Oy, which specialises in advanced analytics solutions. Thanks to this acquisition, Digia can provide its customers with a unique and comprehensive offering for data analytics, artificial intelligence and necessary background integrations. In the course of the year, we also augmented our ERP systems offering by acquiring Mavisystems Oy, which specialises in Microsot Dynamics ERP systems and in CRM solutions.

Skilled and motivated personnel are the cornerstone of all our operations. We offer our employees a wide range of interesting jobs in IT services along with potential for career development and learning at work. During the review period, our number of personnel grew by 86.

In addition, we restructured Digia’s organisation in the fourth quarter. This restructuring aims to further boost the cost-effectiveness of operations and enhance our capabilities to serve our customers better in the future market for digital ecosystems and data utilisation. Our new organisation came into force on 1 January 2019.

In 2018, we strengthened our position in several service areas in the Finnish IT services market. We developed and expanded our offering and fine-tuned our service portfolio to improve its effectiveness. Our efforts in 2018 laid the groundwork for successful further business development in 2019. Our objective for 2019 is to keep growing at a faster pace than the IT service market while improving our operating profit.”

CHANGE IN DIVIDEND POLICY

On 5 February 2018, Digia's Board of Directors decided to change the company's dividend policy. According to the revised dividend policy, Digia’s goal is to distribute at least 30 per cent of the Group's annual result as dividends.

PROPOSAL FOR DIVIDEND DISTRIBUTION

At the end of 2018, the distributable shareholders’ equity of Digia Plc was EUR 48,020,874, of which EUR 4,308,129 was the net profit for the year. At the Annual General Meeting, the Board of Directors will propose that a dividend of EUR 0.07 per share be paid according to the confirmed balance sheet for the fiscal year ending 31 December 2018. Shareholders listed on the shareholder register maintained by Euroclear Finland Oy on the dividend reconciliation date, 19 March 2019, will be eligible for the payment of dividend. Dividends will be paid on 26 March 2019.

INVITATION TO THE FINANCIAL STATEMENT BULLETIN BRIEFING

Digia will hold a briefing for analysts on Friday, 8 February 2019 at 11 am at the Business Meeting Park, Helsinki (Forum, Mannerheimintie 20 B). You are most welcome to attend the briefing.

You may also follow the briefing online via a live stream from 11.00 at: https://www.inderes.fi/fi/videot/digia-q42018-tilinpaatostiedote-822019-klo-1100-alkaen

The material and presentation for the event will be available from 11 am on 8 February 2019 on the company’s website: digia.com/en/investors/reports-and-presentations.

FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Digia Plc’s 2018 Annual Report will be published on 22 February 2019 in electronic format on the company’s website: digia.com and digia.com/en/investors/reports-and-presentations.

The Board of Directors' report and the financial statements for 2018 will be published as part of the Annual Report.

FURTHER INFORMATION

President & CEO Timo Levoranta, tel. (exchange) +358 (0)10 313 3000

DISTRIBUTION

Nasdaq Helsinki
Key media
digia.com

Digia is a profitably growing IT service company that helps its customers harness digitalisation opportunities. As a visionary partner, Digia develops and innovates solutions that support business operations together with its customers. We adapt our expertise to their specific industries to help them develop digital services, manage operations and utilise information. We employ approximately 1,100 experts in Finland and Sweden. We are expanding our international presence together with our customers. Digia's net sales in 2018 totalled EUR 112.1 million. The company is listed on NASDAQ Helsinki (DIGIA). digia.com

Attachment

• Digia Plc Financial Statement Bulletin 2018