ASIAKASTIETO GROUP PLC, STOCK EXCHANGE RELEASE ON 31 AUGUST 2018 AT 11.00 A.M.
EEST
Asiakastieto Group's Half Year Financial Report 1.1. - 30.6.2018: Asiakastieto
and UC creating a stronger future together
SIGNIFICANT EVENTS
The acquisition of UC
Asiakastieto Group Plc announced on 24 April 2018 that it has signed an
agreement to combine with UC AB through acquiring the shares in UC. The
combination of Asiakastieto Group Plc and UC AB was completed as announced
during the second quarter, 29 June 2018, as a result of which UC AB's
consolidated balance sheet has been consolidated as part of Asiakastieto Group
Plc's consolidated balance sheet. Due to the date of the merger, the
consolidated income statement of Asiakastieto Group Plc half year financial
report does not include UC AB's consolidated income statement data. More
detailed information on the impacts of the acquisition on the Group's balance
sheet are presented under the note 2.3. Corporate Acquisitions, in the notes to
the consolidated statement of financial position.
UC is one of the leading information service companies in Sweden. The company
provides refined business information and comprehensive credit information on
both consumers and companies that enable companies and private individuals to
make more reliable decisions. The company offers products and services for risk
management, decision-making and sales and marketing. UC's customers include
banks and financial institutions, other companies, private individuals and the
public sector. UC AB net sales amounted to EUR 73,6 million in 2017 and adjusted
EBITDA excluding IFRS adjustments and items affecting comparability was EUR
18,3 million.
To demonstrate the impacts of the acquisition on the result of operations and
financial position of the Group and to improve the comparability, Asiakastieto
Group has prepared unaudited pro forma financial information. In this Half Year
Financial Report, unaudited pro forma statement of income and pro forma key
ratios are shown for the year 2017 and the interim period as if the share
transaction had been completed already on 1 January 2017. The pro forma
financial information is titled as Pro forma information in each paragraph where
they are presented in this Half Year Financial Report. The pro forma financial
reporting principles are described in Note 1 in this Half Year Financial
Report.
Group's new organisational structure
On 20 June 2018, Asiakastieto Group's Board of Directors decided on a new
organisational structure. From 1 July 2018 on, Asiakastieto Group's new
organisation consists of two types of units: business areas and functional units
supporting the business. The business areas are responsible for the Group's
service offering and the functional units for the production, maintenance and
active development of the operations in their own focus area and business
processes. The functional units are Sales Units, Marketing and Communications,
IT and Technology, HR, and Finance.
Group's new business areas
Risk Decisions: Companies engaging in corporate and consumer business use
decision services and solutions for general risk management, credit risk
management, financial management, customer acquisition, decision-making, fraud
and credit loss prevention as well as for gaining knowledge of and identifying
their customers.
Customer Data Management: Customer management services help sales and marketing
professionals to improve the efficiency of their work and to boost customer
management by providing target group tools, services for surveying potential
customers, register updates and maintenance, as well as various target group
extractions.
Digital Processes: Services in this business area include, among others, real
estate and apartment information, information about buildings and their
valuation as well as solutions that help customers to automate their collateral
management processes and digitalise the administration of housing purchases.
Services of the business area are also used for compliance purposes, for
instance to identify companies' beneficial owners and politically exposed
persons
SME and Consumers: Digital services for small and micro companies with easy-to-
use applications and user interfaces for the evaluation of risks and sales
potential, acquisition of other relevant information on customers and business
partners and proof of own creditworthiness. Services for consumers help
consumers to understand and better manage their finances, while simultaneously
protecting them from identity theft and fraud.
SUMMARY
The figures presented in this Half Year Financial Report are unaudited.
April - June 2018 in short
* Net sales amounted to EUR 15,7 million (EUR 14,4 million), an increase of
8,9 %.
* Adjusted EBITDA excluding items affecting comparability was EUR 6,6 million
(EUR 6,6 million), an increase of 0,6 %.
* Adjusted EBIT excluding items affecting comparability and amortisation from
fair value adjustments related to the acquisitions was EUR 5,7 million (EUR
5,9 million), a decrease of 2,4 %(1).
* Operating proft (EBIT) was EUR 1,0 million (EUR 5,8 million). Operating
profit included items affecting comparability of EUR 4,6 million (EUR 0,1
million) mainly resulting from M&A and integration expenses relating to
acquisition of UC and amortisation from fair value adjustments related to
the acquisitions EUR 0,1 million (EUR 0,0 million).
* New products and services share of net sales was 10,5 % (15,6 %)(2).
* Value-added services share of net sales was 71,5 % (70,6 %)(3).
* Free cash flow amounted to EUR 2,4 million (EUR 3,9 million). The impact of
items affecting comparability on free cash flow was EUR -1,7 million (EUR
-0,1 million)(4).
* Earnings per share were EUR -0,00 (EUR 0,29).
January - June 2018 in short
* Net sales amounted to EUR 30,8 million (EUR 28,3 million), an increase of
8,9 %.
* Adjusted EBITDA excluding items affecting comparability was EUR 13,0 million
(EUR 12,8 million), an increase of 2,0 %.
* Adjusted EBIT excluding items affecting comparability and amortisation from
fair value adjustments related to the acquisitions was EUR 11,4 million (EUR
11,4 million), a decrease of 0,7 %(1).
* Operating profit (EBIT) was EUR 5,2 million (EUR 11,2 million). Operating
profit included items affecting comparability of EUR 5,9 million (EUR 0,1
million) mainly resulting from M&A and integration expenses relating to
acquisition of UC and amortisation from fair value adjustments related to
the acquisitions EUR 0,2 million (EUR 0,1 million).
* New products and services share of net sales was 10,1 % (15,3 %)(2).
* Value-added services share of net sales was 71,0 % (70,0 %)(3).
* Free cash flow amounted to EUR 4,0 million (EUR 7,4 million). The impact of
items affecting comparability on free cash flow was EUR -2,2 million (EUR
-0,1 million)(4).
* Earnings per share were EUR 0,20 (EUR 0,57).
KEY FIGURES
1.4. - 1.4. - 1.1. - 1.1. - 1.1. -
EUR million 30.6.2018 30.6.2017 30.6.2018 30.6.2017 31.12.2017
-------------------------------------------------------------------------------
Net sales 15,7 14,4 30,8 28,3 56,2
Net sales growth, % 8,9 12,2 8,9 13,8 14,3
Operating profit (EBIT) 1,0 5,8 5,2 11,2 21,2
EBIT margin, % 6,3 40,0 16,8 39,7 37,8
Adjusted EBITDA(5) 6,6 6,6 13,0 12,8 24,8
Adjusted EBITDA margin,
%(5) 42,0 45,5 42,3 45,2 44,2
Adjusted operating
profit (EBIT)(1, 5) 5,7 5,9 11,4 11,4 22,0
Adjusted EBIT margin,
%(1, 5) 36,6 40,8 36,9 40,4 39,1
New products and
services of net sales,
%(2) 10,5 15,6 10,1 15,3 14,6
Free cash flow(4) 2,4 3,9 4,0 7,4 16,5
Net debt to adjusted (pro forma) (pro forma)
EBITDA, x(6) 3,6 2,0 3,6 2,1 2,1
(____________________________________________________________________)
(1 )The method used for calculating the adjusted operating profit (EBIT), the
comparative figures for the period 1 April - 30 June 2017, half year period 1
January - 30 June 2017 and the financial year 2017 have been changed from 1
April 2018 so that also amortisation from fair value adjustments related to the
acquisitions, and external expenses arising from significant regulatory changes
are taken into account as items to be adjusted.
(2 )The method for calculating the share of new products and services,
comparison data from the period 1 April - 30 June 2017, half year period 1
January - 30 June 2017 and financial year 2017 have been changed starting from
1 January 2018 so that the share includes the total sales of products launched
during the past 24 months. Earlier, the share was calculated as the net sales of
products and services launched during the past 12 months and added by the change
in net sales of products and services launched during the preceding 12 months.
The figures in accordance with the old calculation method in the second quarter
1 April - 30 June 2018 are 1,6 %, in the comparison period 1 April - 30 June
2017 10,4 %, in the half year period 1 January - 30 June 2018 2,6 %, in the
comparison period 1 January - 30 June 2017 9,2 % and in the financial year
2017 9,2 %.
(3) The services of Emaileri Oy have been included in value added services
starting 1 April 2018 and they have been retroactively added to reported first
quarter value added services.
(4 )The method used for calculating the free cash flow, the comparative figures
for the period 1 April - 30 June 2017, the half year period 1 January - 30 June
2017 and the financial year 2017 have been changed from 1 January 2018 so that
the impact of paid taxes is no longer added to the cash flow of business
operations. The figures according to the former calculation method are EUR 3,4
million in the second quarter, EUR 5,5 million in the comparative period 1 April
- 30 June 2017, EUR 5,8 million in the half year period 1 January - 30 June
2018, EUR 9,0 million in the comparative period 1 January - 30 June 2017, and
EUR 20,3 million in the financial year 2017. The impact of items affecting
comparability on free cash flow was EUR -1,7 million in the second quarter, EUR
-0,1 million in the comparative period 1 April - 30 June 2017, EUR -2,2 million
in the half year period 1 January - 30 June 2018, EUR -0,1 million in the
comparative period 1 January - 30 June 2017, and EUR -0,5 million in the
financial year 2017.
(5 )The adjusted performance measures are calculated by adjusting the
performance measures with the following items affecting comparability: M&A and
integration related expenses, redundancy payments, compensations paid, and
external expenses arising from significant regulatory changes. The amount of the
above stated items affecting comparability was EUR 4,6 million in the second
quarter 1 April - 30 June 2018, EUR 0,1 million in the comparative period 1
April - 30 June 2017, EUR 5,9 million in the half year period 1 January - 30
June 2018, EUR 0,1 million in the comparative period 1 January - 30 June 2017,
and EUR 0,5 million in the financial year 2017. Adjusted EBIT excludes also
amortisation from fair value adjustments related to the acquisitions.
(6) For the second quarter and the interim period, the net debt to adjusted
EBITDA has been calculated by dividing the net debt of the consolidated
statement of financial position at 30 June 2018 by the pro forma adjusted EBITDA
of the past 12 months.
Pro forma April - June 2018 in short
* Net sales amounted to EUR 34,1 million (EUR 31,9 million), an increase of
6,8 % (at comparable exchange rates an increase of 10,6 %).
* Adjusted EBITDA excluding items affecting comparability was EUR 9,7 million
(EUR 10,1 million), a decrease of 4,1 % (at comparable exchange rates a
decrease of 2,0 %).
* Adjusted EBIT excluding items affecting comparability and amortisation from
fair value adjustments related to the acquisitions amounted to EUR 8,7
million (EUR 9,3 million), a decrease of 6,8 %.
* Operating profit (EBIT) was EUR 3,2 million (EUR 5,8 million). Operating
profit included items affecting comparability of EUR 2,8 million (EUR 0,7
million) and amortisation from fair value adjustments related to the
acquisitions of EUR 2,7 million (EUR 2,8 million).
* The share of new products and services of net sales was 8,2 % (9,0 %).
* The earnings per share were EUR 0,08 (EUR 0,17).
* The comparable earnings per share were EUR 0,17 (EUR 0,26)(1).
Pro forma January - June 2018 in short
* Net sales amounted to EUR 66,9 million (EUR 63,9 million), an increase of
4,7 % (at comparable exchange rates increase of 8,0 %).
* Adjusted EBITDA excluding items affecting comparability was EUR 19,0 million
(EUR 20,8 million), a decrease of 8,8 % (at comparable exchange rates 6,9
%).
* Adjusted EBIT excluding items affecting comparability and amortisation from
fair value adjustments related to the acquisitions amounted to EUR 17,0
million (EUR 19,2 million), a decrease of 11,7 %.
* Operating profit (EBIT) was EUR 7,7 million (EUR 7,6 million). Operating
profit included items affecting comparability of EUR 3,8 million (EUR 6,0
million) and amortisation from fair value adjustments related to the
acquistions of EUR 5,5 million (EUR 5,6 million).
* The share of new products and services of net sales was 7,5 % (8,7 %).
* The earnings per share were EUR 0,21 (EUR 0,17).
* The comparable earnings per share were EUR 0,39 (EUR 0,35)(1).
PRO FORMA KEY FIGURES
1.4. - 1.4. - 1.1. - 1.1. - 1.1. -
EUR million 30.6.2018 30.6.2017 30.6.2018 30.6.2017 31.12.2017
-------------------------------------------------------------------------------
Net sales 34,1 31,9 66,9 63,9 129,6
Net sales growth, % 6,8 n/a 4,7 n/a n/a
Operating profit (EBIT) 3,2 5,8 7,7 7,6 20,9
EBIT margin, % 9,5 18,2 11,5 11,9 16,1
Adjusted EBITDA 9,7 10,1 19,0 20,8 43,1
Adjusted EBITDA margin, % 28,5 31,7 28,3 32,6 33,2
Adjusted operating profit
(EBIT) 8,7 9,3 17,0 19,2 39,6
Adjusted EBIT margin, % 25,5 29,2 25,4 30,1 30,6
New products and services
of net sales, % 8,2 9,0 7,5 8,7 8,3
Net debt to adjusted
EBITDA, x(2) 3,6 n/a 3,6 n/a n/a
(____________________________________________________________________)
(1 )The comparable pro forma earnings per share does not contain amortisation
from fair value adjustments related to the acquisitions or their tax impact.
(2 )The net debt to adjusted EBITDA has been calculated by dividing the net debt
of Asiakastieto Group's consolidated statement of financial position at 30 June
2018 by the pro forma adjusted EBITDA of the past 12 months.
JUKKA RUUSKA, CEO
"For Asiakastieto Group, the second quarter of 2018 was solid in terms of
growth, but exceptional from the perspective of future business development. The
completed combination with UC AB will more than double our net sales. At the
same time, the transaction costs of the combination had a significant impact on
the profitability of business in the second quarter. The net sales grew 8,9 % to
EUR 15,7 million (EUR 14,4 million). After the non-recurring M&A and integration
expenses related to the combination, the operating profit (EBIT) was EUR 1,0
million (EUR 5,8 million).
The combination with UC creates good opportunities for Asiakastieto Group to
continue as one of the leading providers of digital services and data
innovations. Our knowledge base is now even stronger, and we have more
resources, accelerating the development of innovative and cost-effective
services. We also have better possibilities in the future to invest, for
example, in digital innovations, data refinement and artificial intelligence.
Integration work goes on as planned and our aim is that the new, combined
organisation will be in operation on 1 October 2018.
Our experience and service development history in forecasting the payment
default risk goes back to more than a hundred years. In the future, we can offer
our clients services also for the second dimension of risk management,
minimization of losses, for example, by helping them to assess, reliably and in
real time, the value of collaterals, such as real estates and shares in
condominiums. Our service, which automatically transfers apartment information
included in landlord's certificates in digital form from housing companies to
banks has already been tested successfully with production material together
with Nordea as the piloting bank this spring. Comprehensive digital housing
company and apartment information services for banks and estate agents will be
implemented in 2018."
FUTURE OUTLOOK
Asiakastieto Group Plc expects its operating environment to remain stable in
2018 in its key markets Finland and Sweden, and that it is able to initiate
actions in the second half of the financial year to start to realise synergy
benefits from the combination with UC AB.
The outlook is subject to risks related to, among other factors, the development
of the Finnish and Swedish 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.
ASIAKASTIETO GROUP PLC
Board of Directors
Additional information:
Jukka Ruuska
CEO
tel. +358 10 270 7111
Distribution:
Nasdaq Helsinki Ltd
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 Sweden
under the brand UC and in Finland under the brand Asiakastieto. Asiakastieto and
UC combined on 29 June 2018. Our pro forma annual net sales for 2017 was EUR
130 million and the number of employees was approximately 500. 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 ticker ATG1V. More information about
Asiakastieto Group is available at www.asiakastieto.fi and www.uc.se.
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