Solteq Plc Half Year Financial Report 1 January - 30 June 2018
Solteq Plc Stock Exchange Bulletin 10.8.2018 at 8.00 am
HELSINKI, Finland, Aug. 10, 2018 /PRNewswire/ --Solteq Plc Half Year Financial Report 1 January – 30 June 2018 (IFRS)
The final phase of the business transformation visible in the result for the second quarter
Brief look at January – June 2018
Key figures and ratios
The company has taken the IFRS 15 standard into use on 1 January 2018 retroactively and the comparison figures for 2017 have been adjusted.
Olli Väätäinen, CEO of Solteq: The final phase of the business transformation visible in the result for the second quarter
Solteq Group's revenue was EUR 29.1 million in the first half of the year, a 9.6 per cent increase year-on-year. The drivers of this growth were mainly the acquisitions executed in 2017 and the strong demand for digital services. At the same time, the demand for retail systems decreased due to loss of customers, driven by consolidation of the retail industry. Nearly one fifth of the Group's revenue originated from outside Finland and continuous services accounted for more than one third of the revenue.
The Group's Finnish and Danish business operations performed as expected during the first half of the year. However, the company's Swedish operations did not achieve the targets set for them and were clearly loss making. The company carried out an efficiency improvement programme in its Swedish business operations, which will result in approximately EUR 1 million annualized cost saving. The cost saving is expected to be fully effective from the beginning of September 2018.
In the first half of the year, the company's adjusted EBITDA was EUR 2.7 million and its adjusted operating profit was EUR 1.4 million. The company's adjusted operating profit for the second quarter was EUR 0.2 million. The main drivers for the weaker than expected result were the Swedish business operations and the loss provisions made for certain old, nearly completed customer projects due to project delays. Other business operations performed as expected.
We invest strongly in future growth by focusing on the development of our own cloud-based software products and services. We have been especially active in areas that enable us to incorporate artificial intelligence and physical autonomous robotics into our products and services. Business Finland (Tekes) granted the company EUR 1.6 million in loan financing for product development in the above-mentioned areas. At the end of the second quarter, the company expanded its robotics offering to the Pepper service robotics by signing a developer cooperation agreement with SoftBank.
We will also continue to develop our own software products and services as well as those we have acquired through acquisitions. The focus of these efforts is mainly smart store system solutions, the optimization of the customer and user experiences in digital services as well as services related to online customer services and customer data management in the energy sector. We estimate that the total product development investments will grow to EUR 2.0 million this year.
During the second quarter, the company's personnel increased by 19 employees and was 569 employees at the end of the review period. During the review period, the company's personnel increased by 90 employees. Our operations are strongly based on the expertise and competencies of Solteqians.
Our reported revenue, EUR 29.1 million, has been calculated in accordance with the IFRS 15 standard. The standard relates to recognizing revenue from contracts with customers. The new standard was implemented on 1 January 2018 fully retrospectively and the comparable figures for 2017 have been adjusted accordingly. Our comparable revenue during the first half of 2017 was EUR 26.6 million.
The Group's order intake was good in the first half of the year. The business outlook is good for the second half of the current financial year and the company's profitability is expected to develop positively.
Guidance on Group outlook
Solteq Group's adjusted operating profit is expected to grow significantly compared to the financial year 2017.
Olli Väätäinen, CEO, tel. +358-50-5578-111
Solteq in brief
Solteq is a Nordic industry-independent IT provider and software house that specialises in digital business solutions. Our mission is to simplify the digital world to make a better tomorrow. We are a partner who knows what it takes to win in digital disruption, regardless of our customer's industry. Our over 550 experts, who work in five countries, develop and implement solutions for clients mainly in the Nordic countries.
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Company Codes: Bloomberg:SOLTEQ@FH, Helsinki:SOLTEQ, ISIN:FI0009007991, RICS:SOLTEQ.HE
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