29.10.2019

    Solteq Plc Interim Report 1 January – 30 September 2019

    Solteq Plc Stock Exchange Bulletin 29.10.2019 at 8.00 am

    Good sales figures for Solteq's software products in third quarter

    July–September

    • Revenue totaled 12,993 thousand euros (12,834).
    • EBITDA was 1,300 thousand euros (1,066).
    • Operating profit was 282 thousand euros (492).
    • The implementation of IFRS 16 -standard improved EBITDA by 492 thousand euros and the operating profit by 48 thousand euros during the third quarter.*
    • Earnings per share was -0.01 euros (-0.01).

    January–September

    • Revenue totaled 42,583 thousand euros (41,937).
    • EBITDA was 5,327 thousand euros (3,619).
    • Operating profit was 2,383 thousand euros (1,821).
    • The implementation of IFRS 16 -standard improved EBITDA by 1,409 thousand euros and the operating profit by 139 thousand euros during the review period.*
    • Earnings per share was 0.04 euros (0.01).
    • Solteq Group’s equity ratio was 31.5 percent (32.7).
    • The Group’s equity ratio excluding the impact from adopting the IFRS 16 -standard would have been 34.3 percent during the review period.*
    • Net cash flow from operating activities was 831 thousand euros (2,354).
    • The revenue was 1.5 percent higher than in the comparison period. Continuous services accounted for approximately one third of the revenue.
    • The company invested strongly in future growth by focusing on the development of our own cloud-based software products and services. During the review period the product development investments amounted to EUR 3.0 million (1.3).

    *Solteq Group implemented the IFRS 16 Leases -standard effective from January 1, 2019. The new standard was implemented using the modified retrospective approach, in which the comparative figures for prior financial periods were not restated.

    Key figures

      7-9/2019 7-9/2018 Change-% 1-9/2019 1-9/2018 Change-% 1-12/2018 Rolling 12mos
    Revenue, TEUR 12,993 12,834 1.2 42,583 41,937 1.5 56,867 57,513
    EBITDA, TEUR 1,300 1,066 21.9 5,327 3,619 47.2 4,766 6,473
    Adjusted EBITDA, TEUR 1,300 1,132 14.8 5,399 3,800 42.1 5,417 7,015
    Operating profit, TEUR 282 492 -42.6 2,383 1,821 30.9 2,466 3,028
    Adjusted operating profit, TEUR 282 558 -49.5 2,455 2,002 22.6 3,117 3,570
    Profit for the financial period, TEUR -187 -105 -76.9 755 247 205.3 356 863
    Earnings per share, EUR -0.01 -0.01 -69.7 0.04 0.01 201.1 0.02 0.04
    Operating profit, % 2.2 3.8   5.6 4.3   4.3 5.3
    Adjusted operating profit, % 2.2 4.4   5.8 4.8   5.5 6.2
    Equity ratio, %       31.5 32.7   32.4 31.3

     

    CEO Olli Väätäinen: Good sales figures for Solteq's software products in third quarter

    Solteq Group's revenue for the first three quarters came to 42.6 million euros, up by 1.5 percent. Approximately a quarter of this revenue came from outside Finland. The revenue of overseas subsidiaries increased considerably. Continuous services accounted for about a third of revenue. The company's own software products and related services contributed around a third and digital services around two thirds of revenue.

    EBITDA for the review period was 5.3 million euros and operating profit 2.4 million euros. Operating profit increased by 0.6 million euros in comparative terms, when adjusted for the adoption of the IFRS 16 standard.

    Operating profit for the third quarter was below the company's expectations. This was due to the postponement of certain customer projects to the fourth quarter. The largest postponed project was the Finnish Customs' cash payment system, which is based on Solteq's own software. Solteq has announced the deal in a separate press release on August 15, 2019. The value of the postponed order was worth more than 300,000 euros.

    In the third quarter, the company won tenders worth more than 2 million euros for its software and the related services. In addition to the deal with Finnish Customs, major commercial successes included the new customer service system for Korpelan Voima joint municipal authority. The system is compliant with the national data hub, and consists of customer service and invoicing functions for electricity sales and transfers, and district heating.

    Solteq continued to invest in the development of its own cloud-based software products and services. Product development investment in the third quarter totaled 0.9 million euros. Product development investments are expected to reach around 3.7 million euros by the end of the year. Investments to product development during the review period enabled strong growth in sales of Solteq's own products. The company expects its positive sales trend to continue.

    The Group's order intake continued to develop positively in Q3, improving considerably compared to the same period last year. The business outlook has remained the same and the company's profitability is expected to improve.

     

    Profit guidance 2019

    Solteq Group’s operating profit is expected to grow clearly compared to the financial year 2018.

     

    Attachments

    Solteq Plc Interim Report 1 Jan – 30 September 2019

     

    Further information

    Olli Väätäinen, CEO
    tel +358 50 5578 111
    e-mail olli.vaatainen@solteq.com

    Kari Lehtosalo, CFO
    tel: +358 40 751 7194
    e-mail: kari.lehtosalo@solteq.com

     

    DISTRIBUTION

    NASDAQ OMX Helsinki
    Key media
    www.solteq.com

     

    Solteq in brief

    Solteq is a Nordic IT service provider and software house that specializes in digital business solutions and vertical software markets.

    2019