Digia Plc
Stock Exchange Release
25 April 2025 at 8:00 AM EEST
Organic growth in a challenging market: first-quarter net sales up 0.2 per cent,
with an EBITA margin of 8.5 per cent, investments to sustainable growth
January-March 2025
· Net sales: EUR 53.8 (53.6) million, up 0.2 per cent. Organic growth 0.2 per
cent.
· Operating profit (EBITA): EUR 4.6 (5.5) million, down 17.6 per cent; EBITA
margin: 8.5 (10.3) per cent of net sales.
· Operating profit (EBIT): EUR 3.9 (4.8) million, down 18.3 per cent;
operating margin: 7.2 (8.9) per cent of net sales.
· Earnings per share: EUR 0.10 (0.13).
· Return on equity (ROE): 13.0 (18.4) per cent.
· Equity ratio: 49.7 (43.8) per cent.
· Profit guidance remains unchanged: Digia's net sales will grow (EUR 205.7
million in 2024) and its operating profit (EBITA) will either increase or remain
on a par with 2024 (EUR 21.2 million in 2024).
Unless otherwise stated, the comparison figures provided in parentheses refer to
the corresponding period of the previous year.
Group key figures
+---------------------------------+--------+--------+---------+---------+
|EUR 1,000 |1-3/2025|1-3/2024|Change, %|1-12/2024|
+---------------------------------+--------+--------+---------+---------+
|Net sales |53,776 |53,648 |0.2% |205,672 |
+---------------------------------+--------+--------+---------+---------+
|Operating profit (EBITA) |4,553 |5,523 | -17.6% |21,161 |
+---------------------------------+--------+--------+---------+---------+
|- as a % of net sales |8.5% |10.3% | |10.3% |
+---------------------------------+--------+--------+---------+---------+
|Operating profit (EBIT) |3,883 |4,751 | -18.3% |18,208 |
+---------------------------------+--------+--------+---------+---------+
|- as a % of net sales |7.2% |8.9% | |8.9% |
+---------------------------------+--------+--------+---------+---------+
|Result for the period |2,713 |3,415 | -20.6% |13,291 |
+---------------------------------+--------+--------+---------+---------+
|- as a % of net sales |5.0% |6.4% | |6.5% |
+---------------------------------+--------+--------+---------+---------+
| | | | | |
+---------------------------------+--------+--------+---------+---------+
|Return on equity, % |13.0% |18.4% | |16.7% |
+---------------------------------+--------+--------+---------+---------+
|Return on investment, % |13.6% |17.0% | |16.6% |
+---------------------------------+--------+--------+---------+---------+
|Interest-bearing net liabilities |11,639 |22,060 |-47.2% |11,642 |
+---------------------------------+--------+--------+---------+---------+
|Net gearing, % |14.0% |30.1% | |13.9% |
+---------------------------------+--------+--------+---------+---------+
|Equity ratio, % |49.7% |43.8% | |52.9% |
+---------------------------------+--------+--------+---------+---------+
| | | | | |
+---------------------------------+--------+--------+---------+---------+
|Number of personnel at period-end|1,596 |1,547 |3.2% |1,576 |
+---------------------------------+--------+--------+---------+---------+
|Average number of personnel |1,593 |1,544 |3.2% |1,553 |
+---------------------------------+--------+--------+---------+---------+
|Shareholders' equity |83,269 |73,215 |13.7% |83,718 |
+---------------------------------+--------+--------+---------+---------+
|Balance sheet total |173,390 |173,770 |-0.2% |163,486 |
+---------------------------------+--------+--------+---------+---------+
|Earnings per share, EUR |0.10 |0.13 |-19.7% |0.50 |
+---------------------------------+--------+--------+---------+---------+
|Earnings per share (diluted), EUR|0.10 |0.13 |-20.2% |0.50 |
+---------------------------------+--------+--------+---------+---------+
CEO's Review:
“The IT services market situation remained challenging in the first quarter of
2025. Despite the market conditions, Digia's business model and operational
management once again proved their strength. Thanks to good performance in
March, we remained on a profitable growth track. Net sales grew slightly year-on
-year by 0.2 per cent. Our key growth investments focused on sales, service
productisation and bolstering technology partnerships.
In January-March, our net sales amounted to EUR 53.8 (53.6) million. Our
operating profit (EBITA) was down on the strong comparison period, amounting to
EUR 4.6 (5.5) million. Our EBITA margin amounted to 8.5 (10.3) per cent of net
sales. The first-quarter result included 0.3 million in expenses with no cash
flow impact related to changes in the fair value of acquisitions. Digia's
continuing service and maintenance business accounted for 50.0 (50.6) per cent
of net sales in the first quarter.
Digia's Digital Solutions business area continued its strong organic growth out
of the company's four business areas, particularly in modern software
development. Managed Solutions and Business Platforms faced challenges because
customers were cautious in their investments as well as delayed both decision
-making and project launches. Financial Platforms, the smallest of the business
areas, suffered from the slow startup of two major customer projects.
New customer contracts bolster our position as a turnkey provider of smart
solutions
I am pleased with the several sales successes achieved during the first quarter.
It is great to note that Digia strengthened its position as a pioneer in the AI
and data market, securing contracts worth over 10 million euros in this area.
The most significant new breakthrough was the five-year, seven-million-euro
contract signed with Business Finland. Under this contract, we will be
responsible for Business Finland's data platform and future analytics,
automation, and AI solutions.
Other contracts announced in the first months of the year included a contract
worth EUR 8 million to serve as the ICT system support partner of the Finnish
Defence Forces and a EUR 3 million contract to expand cooperation with HSL in
API development. In addition, Valtori is continuing its integration partnership
with us with a EUR 4.5 million contract and also selected Digia as its Oracle
Private Cloud partner with a two-year contract valued at EUR 4.5 million.
In the occupational pensions sector, we started up a major system overhaul in
cooperation with Arek Oy in a project to modernise the joint insurance, employer
services and pension calculation services of occupational pension providers with
a state-of-the-art technological foundation.
In addition, it is wonderful to see that our operations under a Preferred
Partner contract with a major company in the financial sector that we signed in
autumn 2024 have grown in line with our expectations during the first months of
the year.
Digia is positioning itself in the market as a trusted partner for customers and
a turnkey provider of smart solutions. This position is bolstered by Digia's
expertise in delivering business-critical systems and long experience in
continuous services. One of the ongoing market trends we see is that customers
still want to centralise their procurements in the hands of trusted providers
with a broad offering. In addition, safeguarding business continuity is
highlighted in customer demand.
Growth investments in productisation and technology partnerships
Our spearhead project in service productisation in the first quarter was the
Digia Business Operations Center - it is a comprehensive 24/7 service package
providing around-the-clock business support for our customers. The service
includes solutions for real-time situational awareness of operations in ICT
environments, process monitoring and necessary AI-assisted responses. In multi
-vendor environments, the service also involves coordinating and directing other
suppliers. The service will be produced in accordance with the customer's
security classification requirements and will be launched commercially in the
second quarter.
Digia Business Operations Center also supports our long-term efforts to build up
Digia's growth in the Application Management Services (AMS) market. According to
the latest Whitelane Research study, Digia is one of the best application
service providers in Finland, and we are also in the top ten in the Nordic
countries. Our success testifies to our ability to serve large organisations in
both Finland and the other Nordic countries. The Whitelane Global IT Sourcing
Study is considered one of the most representative reports on the IT market.
We have also continued the development of our Envision ERP product. The
functionality has been expanded to meet the requirements of the international
defense industry and Envision can now be delivered as a high-security solution
from the customer's data center or from the Google Cloud platform. Additionally,
the first AI features have been productized for the platform, with their
commercial launch scheduled for the second quarter.
In recognition of our technological leadership, Traficom approved our secure
data transfer product, Digia Linja, for its list of security-critical products.
This bolsters our ability to deliver solutions with the highest level of
security to our customers.
Technology partnerships enable smart customer solutions
During the first months of the year, we strengthened our strategically important
technology partnerships, especially with Microsoft and Google. Digia is one of
the leading players in the Microsoft ecosystem in Finland. In the first quarter,
we invested in and achieved specialisations in Analytics on Microsoft Azure and
Microsoft Small and Midsize Business Management. With our certified expertise,
we can better help our customers build smart business platforms and harness data
and AI.
The calibre of our cloud expertise is also demonstrated by our Google Cloud
Platform Infrastructure Specialisation - this major recognition further
strengthens our position as a cloud services expert and also lays the foundation
for delivering AI solutions.
A dynamic working community and sustainability
In the first quarter, we opened our modernised Kamppi office, which supports the
requirements of hybrid and collaborative work. Employees have been pleased with
the new office. At the same time, we significantly scale down our premises at
Atomitie, Helsinki. Digia's attractiveness as an employer was also evident in
the record number of applicants to our Career Compass programme.
In the first quarter of 2025, we published our Group Sustainability Report for
2024, our first in line with the Corporate Sustainability Reporting Directive
(CSRD). Sustainability is the cornerstone of Digia's strategy and is included in
the objectives set for the strategy period.
Market outlook and Digia's strategy
The uncertain international political situation fuels market instability. In our
view, the market will remain challenging in the short term. Digia's "Unlock Your
Intelligence" strategy sets its sights on long-term profitable growth. We are
implementing our strategy by continuously renewing and enhancing our operations
and by making investments targeted at future growth in line with the market
situation.
Profit guidance for 2025 remains unchanged
Digia's profit guidance for 2025: Digia's net sales will grow (EUR 205.7 million
in 2024) and its operating profit (EBITA) will either increase or remain on a
par with 2024 (EUR 21.2 million in 2024).
Events after the review period
There have been no major events since the review period.
Briefing invitation
A briefing for analysts will be held at 9:00 am EEST on Friday 25 April 2025 as
a Teams meeting. Attendance instructions have been emailed to participants.
The material and presentation for the event will be available from 9:00 am EEST
on 25 April 2025 on the company's website: digia.com/en/investors/reports-and
-presentations (https://digia.com/sijoittajat/raportit-ja-presentaatiot/).
Financial reporting in 2025
Digia will publish its half-year interim report for 2025 at 3:00 pm EEST on
Thursday, 7 August 2025, and its business review for January-September 2025 at
3:00 pm EEST on Thursday, 23 October 2025.
For further information, please contact:
Timo Levoranta, President & CEO
tel. +358 40 500 2050
Distribution
Nasdaq Helsinki
Key Media
digia.com
Digia is a software and service company that combines technological
possibilities and human capabilities to build intelligent business, society and
a sustainable future. Our mission is to ensure that our customers are at the
forefront of digital evolution. There are more than 1,500 of us working at Digia
and we operate globally with our customers. Digia's net sales totalled EUR 205.7
million in 2024. The company is listed on Nasdaq Helsinki (DIGIA). digia.com