Asiakastieto Group’s Financial Statement Release 1.1. – 31.12.2019: Net sales grew as expected

11/02/2020

Asiakastieto Group Plc_Financial Statement Release_2019

ASIAKASTIETO GROUP PLC, STOCK EXCHANGE RELEASE, 11 FEBRUARY 2020 AT 11.00 EET

Asiakastieto Group’s Financial Statement Release 1.1. – 31.12.2019: Net sales grew as expected

SUMMARY

Asiakastieto Group Plc acquired on 29 June 2018 the shares in UC AB. As a result of the acquisition, UC’s consolidated balance sheet has been consolidated as part of Asiakastieto Group Plc’s consolidated balance sheet from 30 June 2018 and UC’s consolidated income statement as part of Asiakastieto Group Plc’s consolidated income statement from 1 July 2018. In this financial statement release, the reported figures for the review period 1 January–30 June do not include UC’s figures.

The figures presented in this financial statement release are based on the audited 2019 financial statements.

October – December 2019 in brief

  • Net sales amounted to EUR 39,2 million (EUR 35,9 million), an increase of 9,1 % (at comparable exchange rates, an increase of 11,1 %).
  • Adjusted EBITDA excluding items affecting comparability was EUR 13,6 million (EUR 12,2 million), an increase of 11,3 % (at comparable exchange rates an increase of 12,9 %).
  • Adjusted EBITDA excluding IFRS 16 impact was EUR 13,0 million (EUR 12,2 million), an increase of 6,6 % (at comparable exchange rates an increase of 8,3 %).
  • Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to the acquisitions was EUR 11,6 million (EUR 10,9 million), an increase of 6,5 %.
  • Operating profit (EBIT) was EUR 7,8 million (EUR 7,1 million). Operating profit included items affecting comparability of EUR 3,8 million (EUR 3,7 million), mainly arising from amortisation from fair value adjustments of EUR 3,0 million (EUR 2,9 million) related to acquisitions as well as M&A and integration expenses.
  • New products and services represented 4,4 % (7,8 %) of net sales.
  • Free cash flow amounted to EUR 6,9 million (EUR 7,9 million). The effect of items affecting comparability on free cash flow was EUR -0,7 million (EUR -2,6 million).
  • Earnings per share were EUR 0,23 (EUR 0,21).
  • Comparable earnings per share were EUR 0,32 (EUR 0,30) 1.

January – December 2019 in brief

  • Net sales amounted to EUR 146,0 million (EUR 98,1 million), an increase of 48,7 %.
  • Adjusted EBITDA excluding items affecting comparability was EUR 51,5 million (EUR 36,1 million), an increase of 42,7 %.
  • Adjusted EBITDA excluding IFRS 16 impact was EUR 49,3 million (EUR 36,1 million), an increase of 36,4 %.
  • Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to the acquisitions was EUR 42,6 million (EUR 32,0 million), an increase of 33,0 %.
  • Operating profit (EBIT) was EUR 27,8 million (EUR 16,7 million). Operating profit included items affecting comparability of EUR 14,8 million (EUR 15,3 million), mainly arising from amortisation from fair value adjustments of EUR 11,6 million (EUR 5,9 million) related to acquisitions, M&A expenses and redundancy-related expenses associated with the restructuring of operations.
  • The UC KYC was closed down in the second quarter in Sweden. The effect of closing down the service was EUR -0,3 million on adjusted EBITDA and EUR -1,5 million on adjusted EBIT.
  • New products and services represented 4,0 % (8,8 %) of net sales.
  • Free cash flow amounted to EUR 32,1 million (EUR 15,9 million). The effect of items affecting comparability on free cash flow was EUR -2,7 million (EUR -8,5 million).
  • Earnings per share were EUR 0,82 (EUR 0,56).
  • Comparable earnings per share were EUR 1,20 (EUR 0,78) 1.

____________________________________________________________________
1 The comparable earnings per share does not contain amortisation from fair value adjustments related to the acquisitions or their tax impact.

KEY FIGURES

      
  1.10.1.10.1.1.1.1.
EUR million 31.12.201931.12.201831.12.201931.12.2018
      
Net sales 39,235,9146,098,1
Net sales growth, % 9,1146,448,774,6
Operating profit (EBIT) 7,87,127,816,7
EBIT margin, % 19,819,819,017,0
Adjusted EBITDA 13,612,251,536,1
Adjusted EBITDA margin, % 34,734,035,336,8
Adjusted EBITDA excluding
IFRS 16 impact
 13,012,249,336,1
Adjusted EBITDA excluding
IFRS 16 impact margin, %
 33,334,033,836,8
Adjusted operating profit (EBIT) 11,610,942,632,0
Adjusted EBIT margin, % 29,530,229,232,7
New products and services of
net sales, %
 4,47,84,08,8
Free cash flow 6,97,932,115,9
Net debt to adjusted
EBITDA, x
 2,7pro forma
3,3
2,9pro forma
3,3

Asiakastieto Group has prepared unaudited pro forma financial information to demonstrate the impacts of the UC acquisition, completed on 29 June 2018, on the result of operations and financial position of the Group and to improve the comparability of financial information. In this financial statement release, unaudited pro forma financial information is shown for the year 2018 as if the share transaction had been completed already on 1 January 2017. The pro forma financial information is indicated as Pro forma information in each instance where it appears in this financial statement release. The pro forma financial reporting principles are described in Note 1 to this interim report.

The figures in the pro forma summary for the comparison period 1 January–30 December 2018 are presented as pro forma figures, as if the acquisition of UC had taken place already at the beginning of 2017. The second half-year figures for 1 July–31 December 2018 are presented as actual reported figures.

Pro forma January – December 2019 in brief

  • Net sales amounted to EUR 146,0 million (EUR 134,3 million), an increase of 8,7 % (at comparable exchange rates, an increase of 10,6 %).
  • Adjusted EBITDA excluding items affecting comparability was EUR 51,5 million (EUR 42,1 million), an increase of 22,5 % (at comparable exchange rates an increase of 23,9 %).
  • Adjusted EBITDA excluding IFRS 16 impact was EUR 49,3 million (EUR 42,1 million), an increase of 17,1 % (at comparable exchange rates an increase of 18,4 %).
  • Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to the acquisitions was EUR 42,6 million (EUR 37,7 million), an increase of 13,1 %.
  • Operating profit (EBIT) was EUR 27,8 million (EUR 19,2 million). Operating profit included items affecting comparability of EUR 3,3 million (EUR 7,3 million) and amortisation from fair value adjustments related to the acquisitions of EUR 11,6 million (EUR 11,1 million).
  • The UC KYC was closed down in Sweden. The effect of closing down the service was EUR -0,3 million on adjusted EBITDA and EUR -1,5 million on adjusted EBIT.
  • New products and services represented 4,0 % (7,8 %) of net sales.
  • Earnings per share were EUR 0,82 (EUR 0,54).
  • Comparable earnings per share were EUR 1,20 (EUR 0,90)1.

__________________________________________________________
1 The comparable pro forma earnings per share does not contain amortisation from fair value adjustments related to the acquisitions or their tax impact.

PRO FORMA KEY FIGURES

    Actual
1.1.
1.1.
EUR million   31.12.201931.12.2018
      
Net sales   146,0134,3
Net sales growth, %   8,73,6
Operating profit (EBIT)   27,819,2
EBIT margin, %   19,014,3
Adjusted EBITDA   51,542,1
Adjusted EBITDA margin, %   35,331,3
Adjusted EBITDA excluding IFRS 16 impact  49,342,1
Adjusted EBITDA excluding IFRS 16 impact, % 33,831,3
Adjusted operating profit (EBIT)   42,637,7
Adjusted EBIT margin, %   29,228,1
New products and services of net sales, % 4,07,8
Net debt to adjusted EBITDA, x 2,93,3

JUKKA RUUSKA, CEO

“Asiakastieto Group grew in line with our expectations in the final quarter of the financial year 2019. Net sales increased at comparable exchange rates by 11,1 % to EUR 39,2 million (EUR 35,3 million). The Group’s net sales were boosted particularly by the strong growth of the SME and Consumers business, with the Proff acquisition completed in July being a key factor. The Risk Decisions business also continued to grow, although the rate of growth was slower than in the preceding quarters.

Adjusted EBITDA excluding the impact of IFRS 16 grew at comparable exchange rates by 8,3 %, reaching EUR 13,0 million (EUR 12,0 million). The development of profitability was slightly lower than the rate of growth of net sales due to the acquired Proff business having a diluting effect on the EBIT margin as well as non-recurring investments allocated in the fourth quarter to the renewal of the Group’s strategy and the preparation of the IT production platform renewal programme.

The Group’s adjusted operating profit excluding non-recurring items and other adjustable items grew in the fourth quarter by 6,5 % and amounted to EUR 11,6 million (EUR 10,9 million). New services’ share of net sales turned to a slight increase after the previous quarter and stood at 4,4 %.

The housing transaction market is quickly becoming more digital in both of our markets, Finland and Sweden. Our services make it possible to carry out housing transactions where it suits the customer best. They eliminate the need to set up meetings at the bank. Instead, the deed of sale and other documents related to the transaction can be signed digitally from home or the real estate agent’s office, for example. Finland’s first digital housing transaction was completed with the help of our housing transaction service in December.

We look back on 2019 as the year of Asiakastieto Group’s Nordic growth. Our Nordic visibility has been expanded, our integration measures are progressing in line with our objectives and we have transitioned to normal operation at the organisational level. In late 2019, we started to work on defining our new strategy for 2020–2023. In addition to the Executive Team, the strategy development effort incorporates the views of nearly a hundred Asiakastieto employees. We made progress with our future-oriented efforts during the year as planned. Our Nordic growth story will go on.”

FUTURE OUTLOOK

Net sales: Asiakastieto Group expects its net sales growth in 2020 to be close to the upper limit of its long-term target range (5-10 %), weighted to the first half of the year.

EBITDA: Asiakastieto Group expects its adjusted EBITDA margin to grow somewhat in 2020 in comparison to previous year.

Capital expenditure: Asiakastieto Group expects its capitalised product development and software expenses in 2020 to exceed the previous year’s level.

The outlook is based on the assumption that exchange rates prevail at the current level.

The outlook is subject to risks related to, among other factors, the economic development of the operating countries of the Group as well as the development of 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 and in the company’s listing prospectus, approved by the Financial Supervisory Authority on 10 September 2018, and also available on the investor pages of the company website.

Helsinki, 11 February 2020

ASIAKASTIETO GROUP PLC
Board of Directors

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

Distribution:
Nasdaq Helsinki
Major media
investors.asiakastieto.fi

Asiakastieto Group is one of the leading providers of digital business and consumer information services in the Nordic countries. The Group's products and services are primarily used for risk management, finance and administration, decision-making and sales and marketing purposes. We are operating in Finland under the brand Suomen Asiakastieto and in Sweden under the brand UC. Our annual net sales for 2019 was EUR 146 million and the number of employees was approximately 420. The Group serves several industries, the largest ones including finance and banking as well as wholesale and retail sectors and expert service companies. Asiakastieto Group is listed on Nasdaq Helsinki with the trading code ATG1V. More information about Asiakastieto Group is available at www.asiakastieto.fi and www.uc.se.

Attachment