Asiakastieto Group's Half Year Financial Report 1.1. - 30.6.2017: Strong service development in the first half of the year

03/08/2017

Asiakastieto Group Plc_Half year financial report_2017

Asiakastieto Group Plc, stock exchange release 3 AUGUST AT 11.00 EEST

Asiakastieto Group's Half Year Financial Report 1.1. - 30.6.2017: Strong service development in the first half of the year

SUMMARY

The figures presented in this Half Year Financial Report are unaudited.

April - June 2017 in short:

-  Net sales amounted to EUR 14,4 million (EUR 12,9 million), an increase of 12,2 %.
-  Adjusted EBIT excluding non-recurring and other adjusted items was EUR 5,9 million (EUR 4,9 million), an increase of 18,5 %.
-  Operating profit (EBIT) was EUR 5,8 million (EUR 6,0 million). Operating profit included non-recurring expenses and other adjusted items of EUR 0,1 million (EUR 0,0 million). Operating profit in the comparative period included (EUR 1,1 million) non-recurring, adjusted profit on sale of office premises.
-  The share of new products and services of net sales was 10,4 % (8,3 %).
-  The share of value-added services of net sales was 70,6 % (65,4 %).
-  Free cash flow amounted to EUR 5,5 million (EUR 3,5 million). The impact of non-recurring and other adjusted items on free cash flow was EUR -0,1 million (EUR -0,0 million).
-  Earnings per share were EUR 0,29 (EUR 0,32).

January - June 2017 in short:

-  Net sales amounted to EUR 28,3 million (EUR 24,8 million), an increase of 13,8 %.
-  Adjusted EBIT excluding non-recurring and other adjusted items was EUR 11,4 million (EUR 10,0 million), an increase of 13,8 %.
-  Operating profit (EBIT) was EUR 11,2 million (EUR 11,1 million). Operating profit included non-recurring expenses and other adjusted items of EUR 0,1 million (EUR 0,0 million). Operating profit in the comparative period included (EUR 1,1 million) non-recurring, adjusted profit on sale of office premises.
-  The share of new products and services of net sales was 9,2 % (9,2 %).
-  The share of value-added services of net sales was 70,0 % (64,9 %).
-  Free cash flow amounted to EUR 9,0 million (EUR 7,4 million). The impact of non-recurring and other adjusted items on free cash flow was EUR -0,1 million (EUR -0,1 million).
-  Earnings per share were EUR 0,57 (EUR 0,57).

Future outlook 2017

Asiakastieto Group expects its net sales growth rate to be around the higher end of long term target 5-10%. Adjusted euro-nominated net operating profit is expected to grow from last year but at a slower pace than net sales.

KEY FIGURES

  1.4.- 1.4.- 1.1.- 1.1.- 1.1.-
EUR million 30.6.2017 30.6.2016 30.6.2017 30.6.2016 31.12.2016
Net sales 14,4 12,9 28,3 24,8 49,2
Net sales growth, % 12,2 13,4 13,8 13,5 12,5
Adjusted EBITDA1 6,6 5,6 12,8 11,2 21,7
Adjusted EBITDA margin, %1 45,5 43,4 45,2 45,1 44,1
Adjusted operating profit (EBIT)1 5,9 4,9 11,4 10,0 19,2
Adjusted EBIT margin, %1 40,6 38,4 40,2 40,2 39,1
New products and services share of net sales, % 10,4 8,3 9,2 9,2 7,4
Free cash flow2 5,5 3,5 9,0 7,4 17,2
Net debt to adjusted EBITDA, x 2,0 2,4 2,1 2,4 2,2

___________________________________________________________________
1 Adjusted key figures are adjusted by following items: M&A related fees for legal and other advisory services, redundancy payments and compensations paid. The above listed adjusted items were EUR -0,1 million for the second quarter 1 April - 30 June 2017, EUR -0,0 million for the comparative period 1 April - 30 June 2016, EUR -0,1 for interim period 1 January - 30 June 2017, EUR -0,0 million for the comparative period 1 January - 30 June 2016 and EUR -0,3 million for the financial year 2016. Adjusted key figures for the financial year 2016 are also adjusted by the non-recurring profit on the sale of shares of office premises EUR 1,1 million.

2 The impact of adjusted items on free cash flow was EUR -0,1 million for the second quarter 1 April - 30 June 2017, EUR -0,0 million for the comparative period 1 April - 30 June 2016, EUR - 0,1 for the interim period 1 January - 30 June 2017, EUR -0,1 million for the comparative period 1 January - 30 June 2016 and EUR -0,4 million for the financial year 2016.

JUKKA RUUSKA, CEO

"In the second quarter of the financial year 2017 Asiakastieto Group's net sales continued its strong growth, being 12,2%. During the first six months, we launched over twenty new services, of which as much as thirteen in the second quarter. The good demand for the new services launched by us created a basis for the continued increase in net sales. The growth is strengthened by positive economic outlooks and the volume growth brought on by the invigorated business of our client enterprises. Our clients are also to a greater extent buying processed services, which better support their processes, the share of these constituting already more than two thirds of our entire net sales.

Asiakastieto Group's net sales amounted to EUR 14,4 million in the second quarter (EUR 12,9 million). Growth occurred especially in the product areas of Customer Management, Real Estate and Collateral Information Services and Consumer Information Services. The adjusted net operating profit of the group grew in the second quarter, being EUR 5,9 million, whereas it was EUR 4,9 million in the comparative period 2016. The adjusted EBIT margin increased from the respective quarter of the previous year, because of the large share of new products of the sales and generally the large share of value added services.

Knowing the customer and own supply chain even more profoundly than before as well as complying to the ever more complicated legislation will demand a large contribution from companies. In the second quarter, we launched a number of new services, which provide our clients with even better opportunities to meet their compliance commitments set by legislation in an efficient manner, boosting their customer experience. Relating to the prevention of money laundering and financing of terrorism, it must be possible to identify so-called beneficial owners of companies. The deduction of persons in the background of these companies manually is a labour intensive and difficult task, but with our service the work can automated. Our ESG Report service launched in June is based on entirely new data on the backgrounds of companies. Such data has not been available on private enterprises before. With Asiakastieto's ESG Report our clients can automate the exploration and monitoring of companies' ESG responsibility. 

In conformity with our strategy, we want to generate transparency and trust. For the support of this objective we have launched Purchase Service, with which any company can tender out any acquisition of goods or services. We verify the economic reliability of both the buyer and supplier, thus supporting the competition conditions of correctly acting companies at the same time as we offer our clients added value for their own processes with our new integrated and automated services.

The high quality and consistency of customer experience in all channels is a key success factor now and in the future. For this purpose, we have launched a development programme, in which personnel from all parts of the organisation participate and which will have an impact on the activities of every person at Asiakastieto. This way we believe we can further enhance the satisfaction of our clients and the company's possibilities for successful competition."

FUTURE OUTLOOK 2017

Asiakastieto Group expects its net sales growth rate to be around the higher end of the long term target 5-10%. Adjusted euro-nominated net operating profit is expected to grow from last year but at a slower pace than net sales.

The outlook is subject to risks related to, among other factors, the development of the Finnish economy and the business operations of the Group. The most significant risks related to business operations include, for example, risks related to the success of product and service development activities, launches of new products and services and risks related to competitive tenders and to losing significant customer accounts.

Asiakastieto Group's business risks have been described in more detail on the Company's investor pages at investors.asiakastieto.fi.

Helsinki, on 3 August 2017

ASIAKASTIETO GROUP PLC
Board of Directors

For further information:
Jukka Ruuska, CEO
Asiakastieto Group Plc
tel. +358 10 270 7111

Distribution:
Nasdaq Helsinki Ltd
major media
investors.asiakastieto.fi

Asiakastieto Group is one of the leading Finnish providers of business and consumer information services. The Group's products and services are primarily used for risk management, finance and administration, decision-making and sales and marketing purposes. At the end of 2016, the Group had around 19 000 clients, of which 11 000 were contractual clients. The Group serves several industries, the largest ones including finance and banking as well as wholesale and retail sectors and expert service companies. In 2016, the Group's net sales were EUR 49,2 million and it had 170 employees at the end of 2016. Asiakastieto Group is listed on Nasdaq Helsinki with the ticker ATG1V. More information about Asiakastieto Group is available at www.asiakastieto.fi.