Asiakastieto Group's Interim Report 1.1. - 31.3.2018: Towards Application of the General Data Protection Regulation

04/05/2018

Asiakastieto Group Plc_Interim Report_Q1_2018

Asiakastieto Group Plc, stock exchange release 4 MAY 2018 AT 11.00 A.M. EEST

Asiakastieto Group's Interim Report 1.1. - 31.3.2018: Towards Application of the General Data Protection Regulation

SUMMARY

The figures presented in this Interim Report are unaudited.

January - March 2018 in short:

  • Net sales amounted to EUR 15,1 million (EUR 13,8 million), an increase of 8,9 %.
  • Adjusted EBIT excluding non-recurring and other adjusted items was EUR 5,5 million (EUR 5,5 million), a decrease of 0,3 %.
  • Operating profit (EBIT) was EUR 4,2 million (EUR 5,5 million). Operating profit included non recurring expenses and other adjusted items of EUR 1,3 million (EUR 0,0 million).
  • The share of new products and services of net sales was 9,6 % (15,0 %)1.
  • The share of value-added services of net sales was 68,6 % (69,5 %).
  • Free cash flow amounted to EUR 1,5 million (EUR 3,5 million). The impact of non-recurring and other adjusted items on free cash flow was EUR -0,5 million (EUR -0,0 million) 2.
  • Earnings per share were EUR 0,21 (EUR 0,27).

Future outlook

Asiakastieto Group expects its net sales growth rate to be at the higher end of the long-term target (5 - 10 %) and to maintain adjusted EBITDA margin at about the current level. This outlook does not incorporate the impact of the transaction released 24 April 2018. Asiakastieto Group will publish updated financial guidance when the transaction has been completed.

KEY FIGURES

  1.1. - 1.1. - 1.1. -
EUR million 31.3.2018 31.3.2017 31.12.2017
Net sales 15,1 13,8 56,2
Net sales growth, % 8,9 15,6 14,3
Adjusted EBITDA3 6,4 6,2 24,8
Adjusted EBITDA margin, %3 42,6 44,8 44,2
Adjusted operating profit (EBIT)3 5,5 5,5 21,7
Adjusted EBIT margin, %3 36,4 39,8 38,7
New products and services of net sales, %1 9,6 15,0 14,6
Free cash flow2 1,5 3,5 16,5
Net debt to adjusted EBITDA, x 1,9 1,8 2,1

__________________________________________________________________
1 The method for calculating the share of new products and services has been changed from 1 January 2018 so that the share includes the total net sales of products and services introduced within the past 24 months. This change in the calculation method has also been reflected in the presented comparative figures for 1 January - 31 March 2017 and the financial year 2017. Earlier the share was calculated as net sales of those products and services introduced within the past twelve months together with the increase or decrease in the past twelve months' net sales of those products and services introduced within the preceding twelve months as compared to the net sales of those products and services in the preceding twelve months. Figures based on the old calculation method were 3,6 % for the first quarter 1 January - 31 March 2018, 8,1 % for the comparative period 1 January - 31 March 2017 and 9,2 % for the financial year 2017.

2 The method for calculating the free cash flow has been changed from 1 January 2018 so that the impact of paid taxes is no longer added back to the cash flow from operating activities. This change in the calculation method has also been reflected in the presented comparative figures for 1 January - 31 March 2017 and the financial year 2017. Figures based on the old calculation method were EUR 2,5 million for the first quarter 1 January - 31 March 2018, EUR 3,5 million for the comparative period 1 January - 31 March 2017 and EUR 20,3 million for the financial year 2017.  The impact of adjusted items on free cash flow was EUR -0,5 million for the first quarter 1 January - 31 March 2018, EUR -0,0 million for the comparative period 1 January - 31 March 2017 and EUR -0,5 million for the financial year 2017.

3 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 -1,3 million for the first quarter 1 January - 31 March 2018, EUR -0,0 million for the comparative period 1 January - 31 March 2017 and EUR -0,5 million for the financial year 2017.

JUKKA RUUSKA, CEO

"The first quarter in 2018 was a quarter of reasonable growth for Asiakastieto Group. The net sales increased by 8,9 % to the total of EUR 15,1 million (EUR 13,8 million), in accordance with the guidance. Adjusted EBIT remained at the same level (EUR 5,5 million) as last year, but was weakened by non-recurring, unadjusted items. Due to Easter, exceptionally in the first quarter, there were fewer so-called trading days than last year. Adjusted EBITDA grew 3,4 % in the first quarter. The growth was slowed down by the non-recurring, unadjusted expenses.

In the first quarter, preparations for the EU's General Data Protection Regulation had a big role. The transition period of the regulation ends in May 2018. We are a socially important controller and provider of services and, as a listed company, we are committed to a responsibility of high standards. We demand from ourselves full compliance with the requirements and, in the first quarter, we have prepared our readiness to the entry into force of the regulation. At the same time, we have launched a GDPR service intended for our clients, the purpose of which is, in addition to ensuring the operation conformable to the requirements, to strengthen our clients' conception of responsibility and to make it possible for them to boost their business.

After the end of the reporting period on 24 April 2018 we announced our decision to unite our business with our Swedish partner of long standing, UC AB. I consider this merger a great opportunity to the clients, owners and employees of both companies, because together we will be one of the leading providers of digital services and data innovations in the Nordic region. Together we will be able to invest in new technology even better than before and to cross-offer services and solutions we have developed. With the merger we also make sure that we can offer services which are as compatible as possible to our clients conducting business both in Finland and Sweden. The foundation for the merger is strong because of our common base of values: we are committed to high quality and reliability. The companies have a similar business model, common Nordic values, long-standing customer relationships, and we both are committed to respecting the protection of privacy.

Concerning the net sales and profitability of Asiakastieto Group, we repeat the original guidance. At this stage, we will not issue any guidance on the new, combined entity of companies."

FUTURE OUTLOOK

Asiakastieto Group expects its net sales growth rate to be at the higher end of the long-term target (5 - 10 %) and to maintain adjusted EBITDA margin at about the current level. This outlook does not incorporate the impact of the transaction released on 24 April 2018. Asiakastieto Group will publish updated financial guidance when the transaction has been completed.

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 4 May 2018

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 2017, the Group had around 19 500 clients, of which 10 500 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 2017, the Group's net sales were EUR 56,2 million and it had 156 employees at the end of 2017. Asiakastieto Group is listed on Nasdaq Helsinki with the ticker ATG1V. More information about Asiakastieto Group is available at www.asiakastieto.fi.