Interim Reports / Annual Financial Statements, Stock exchange bulletin

Solteq Plc Interim Report 1 January – 31 March 2016

21.4.2016

Solteq Plc Stock Exchange Bulletin 21.4.2016 at 8.00 am

Revenue and operating profit significantly better than in the comparison period  – focusing on omnichannel and digital commerce bears fruit

Brief look at January – March 2016

  • Revenue totalled 15,4 million euros (9,1 million euros)

  • Operating profit before non-recurring items was 732 thousand euros (464 thousand euros). The impact of the divested business on the operating result without non-recurring items was -212 thousand euros.

  • Operating profit including the non-recurring items was 4.919 thousand euros (464 thousand euros). The non-recurring income and costs related to the divestment of MainIoT Software Ltd totalled +4.187 thousand euros

  • Solteq Group’s equity ratio was 31,8 % (49,1 %).

  • Earnings per share was 0,27 euros (0,02 euros).

  • In line with its strategy, Solteq focused even more on operating in the field of omnichannel and digital commerce solutions during the review period, and sold the entire share capital of MainIoT Software Ltd that provides software solutions for maintenance and services management

KEY FIGURES AND RATIOS 1-3/2016 1-3/2015 change%
Revenue, EUR million 15,4 9,1 68,3%
Operating profit before non-recurring items, EUR million 0,7 0,5 57,8%
Operating profit, EUR million 4,9 0,5 960,1%
Profit for the financial period, EUR million 4,4 0,3 1180,8%
Earnings/share, EUR 0,27 0,02 1073,3%
Operating profit -% 32,0% 5,1% 530,4%
Equity ratio, % 31,8% 49,1% -35,2%

Repe Harmanen, CEO of Solteq: A quarter of focusing on strategy, growth and better profitability

Our result for the first quarter was positive. Compared to the previous year, we both grew and improved our profitability.

At the end of February, we divested subsidiary MainIoT Software Ltd that specialised in ERP software. As the focus in Solteq’s new strategy is on digital commerce solutions and international operations, the deal gave us better possibilities to implement the strategy in terms of both the centralisation of operations and economic opportunities. Because of the transaction, we recognised non-recurring capital gains and reorganisation costs in the result of the first quarter. Focusing on digital commerce will improve the profitability of the Group’s future operations, and now the structure of the company is extremely good for the further implementation of the strategy.

The Company’s financial position is good. Due to the corporate acquisition and favourable business developments, the Company’s equity ratio and financial position improved significantly and normalised during the first quarter. The situation allows us to consider the best alternatives for the strategy concerning investments and possible measures related to the balance sheet. The improved financial position will open new opportunities for faster implementation of the strategy.

All integration measures related to the acquisition of the Descom Group were completed during the first quarter, and no significant non-recurring items were recognised related to them. I am extremely pleased with the contribution of our experts in the creation of the New Solteq. We have made good progress.

As to demand, the first quarter was clearly better and more active than during the last quarter of the previous year. Client demand in all strategic areas increased and we also managed to secure new projects in them. We expect demand to continue at a good level, and we will seek organic growth in all our strategic areas during the latter part of the year. We see that revenue erosion in older technologies has levelled out and that demand for new solutions is developing in a positive direction. At the moment, the main hindrance to our growth is the scarce availability of competent personnel in Finland and in Poland.

The progress of the strategy work has been excellent and we will publish the new strategy in more detail on 25 May 2016. The focus of the strategy is on both domestic and international growth of business. The key elements are expanding the offering of digital solutions in all business operations, the solutions for retail chains and digital business in the Nordic Countries and the solutions for digital commerce globally. In Finland our growth will be mainly organic, but in the Nordic Countries and globally we aim to be active in corporate acquisitions because of the fast implementation of the strategy.

We will maintain the balance between the growth and payment of dividends to be the most attractive choice for our investors as a growing and internationalizing company of digital commerce.

In the heart of the strategy is the group of the best technology experts which has developed to the high level and will continually develop further. With this group we will implement the unique strategy on the field of digital commerce in Finland and globally.

We will maintain the earlier profit guidance concerning the net revenue and operating profit before non-recurring items for 2016 in spite of the divestment of MainIoT Software Ltd.

Guidance on Group outlook

Solteq Group’s revenue is expected to grow significantly compared to financial year 2015. The operating result and the operating result before non-recurring items are expected to grow compared to financial year 2015 as well.

The expected growth of revenue and operating profit is mainly related to the M&A activities completed during the previous financial year and during the review period. In addition the cost synergies arising from the M&A activities are expected to be realized mainly during the year 2016.

Briefing for investors and media

The media and investor briefing for the announcement of financial results of the first quarter of 2016 will be broadcasted on Periscope April 21st at 11.30 on channel @SolteqTweets.

The briefing will be recorded and can be accessed on the website later on the same day.

Interim Report Q1 2016

Further information

Repe Harmanen, CEO, tel. +358 400 467 717

Antti Kärkkäinen, CFO, tel. +358 40 8444 393

DISTRIBUTION

NASDAQ OMX Helsinki
Key media
www.solteq.com

Solteq in brief

Solteq is an expert in digital commerce. We deliver comprehensive solutions for digital commerce under one roof: from back-office processes to customer experience ­­– from supply chain management to online marketing. We have the passion to deliver the unexpected – in a fast-changing world our customers need a partner who can deliver today what they need tomorrow. We employ ca. 500 experts in three different countries and we make deliveries to Europe, North America, Asia and Australia. In 2015 our run-rate revenue was 68 million euro.

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