ASIAKASTIETO GROUP PLC, STOCK EXCHANGE RELEASE 10 MAY 2019 AT 11.00 EEST
Asiakastieto Group's Interim Report 1.1. - 31.3.2019: Integration continues in
line with targets
SUMMARY
Asiakastieto Group Plc acquired on 29 June 2018 the shares in UC AB. As a result
of the acquisition, UC AB's consolidated balance sheet has been consolidated as
part of Asiakastieto Group Plc's consolidated balance sheet from 30 June 2018
and UC AB's consolidated income statement as part of Asiakastieto Group Plc's
consolidated income statement from 1 July 2018. In this Interim Report, the
reported figures for the review periods 1 January-31 March 2018 and 1 January-
30 June 2018 do not include UC AB's figures.
The figures presented in this Interim Report are unaudited.
January - March 2019 in brief
* Net sales amounted to EUR 34,5 million (EUR 15,1 million), an increase of
128,8 %.
* Adjusted EBITDA excluding items affecting comparability was EUR 11,7
million (EUR 6,4 million), an increase of 82,9 %.
* Adjusted EBITDA excluding IFRS 16 impact was EUR 11,2 million (EUR 6,4
million), an increase of 74,2 %.
* Adjusted EBIT excluding items affecting comparability and amortisation
from fair value adjustments related to the acquisitions was EUR 9,8
million (EUR 5,6 million), an increase of 75,2 %.
* Operating profit (EBIT) was EUR 6,7 million (EUR 4,2 million). Operating
profit included items affecting comparability of EUR 3,2 million (EUR 1,3
million), mainly arising from amortisation from fair value adjustments of
EUR 2,8 million (EUR 0,1 million) related to acquisitions, M&A expenses
and redundancy-related expenses associated with the restructuring of
operations.
* New products and services represented 4,4 % (9,6 %) of net sales.
* Free cash flow amounted to EUR 7,3 million (EUR 1,5 million). The effect
of items affecting comparability on free cash flow was EUR -0,6 million
(EUR -0,5 million).
* Earnings per share were EUR 0,20 (EUR 0,21).
* Comparable earnings per share were EUR 0,29 (EUR 0,21)(1).
KEY FIGURES
1.1. - 1.1. - 1.1. -
EUR million 31.3.2019 31.13.2018 31.12.2018
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Net sales 34,5 15,1 98,1
Net sales growth, % 128,8 8,9 74,6
Operating profit (EBIT) 6,7 4,2 16,7
EBIT margin, % 19,3 27,7 17,0
Adjusted EBITDA 11,7 6,4 36,1
Adjusted EBITDA margin, % 34,0 42,6 36,8
Adjusted EBITDA excluding IFRS 16 impact 11,2 6,4 36,1
Adjusted EBITDA excluding IFRS 16 impact
margin, % 32,4 42,6 36,8
Adjusted operating profit (EBIT) 9,8 5,6 32,0
Adjusted EBIT margin, % 28,5 37,2 32,7
New products and services of net sales, % 4,4 9,6 8,8
Free cash flow 7,3 1,5 15,9
(pro forma)
Net debt to adjusted EBITDA, x 3,0 1,9 3,3
(___________________________________________________________________)
(1 )The comparable earnings per share does not contain amortisation from fair
value adjustments related to the acquisitions or their tax impact.
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 interim report, 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 interim report. 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 periods 1 January-31
March 2018 and 1 January-31 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 - March 2019 in brief
* Net sales amounted to EUR 34,5 million (EUR 32,8 million), an increase of
5,2 % (at comparable exchange rates an increase of 7,7 %).
* Adjusted EBITDA excluding items affecting comparability was EUR 11,7
million (EUR 9,3 million), an increase of 26,8 % (at comparable exchange
rates an increase of 28,5 %).
* Adjusted EBITDA excluding IFRS 16 impact was EUR 11,2 million (EUR 9,3
million), an increase of 20,8 % (at comparable exchange rates an increase
of 22,4 %).
* Adjusted EBIT excluding items affecting comparability and amortisation
from fair value adjustments related to the acquisitions was EUR 9,8
million (EUR 8,3 million), an increase of 18,5 %.
* Operating profit (EBIT) was EUR 6,7 million (EUR 4,5 million). Operating
profit included items affecting comparability of EUR 0,4 million (EUR 1,0
million) and amortisation from fair value adjustments related to the
acquisitions of EUR 2,8 million (EUR 2,8 million).
* New products and services represented 4,4 % (6,7 %) of net sales.
* Earnings per share were EUR 0,20 (EUR 0,13).
* Comparable earnings per share were EUR 0,29 (EUR 0,22)(1).
PRO FORMA KEY FIGURES
1.1. - 1.1. - 1.1. -
EUR million 31.3.2019 31.13.2018 31.12.2018
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Net sales 34,5 32,8 134,3
Net sales growth, % 5,2 n/a 3,6
Operating profit (EBIT) 6,7 4,5 19,2
EBIT margin, % 19,3 13,6 14,3
Adjusted EBITDA 11,7 9,3 42,1
Adjusted EBITDA margin, % 34,0 28,2 31,3
Adjusted EBITDA excluding IFRS 16 impact 11,2 9,3 42,1
Adjusted EBITDA excluding IFRS 16 impact, % 32,4 28,2 31,3
Adjusted operating profit (EBIT) 9,8 8,3 37,7
Adjusted EBIT margin, % 28,5 25,3 28,1
New products and services of net sales, % 4,4 6,7 7,8
Net debt to adjusted EBITDA, x 3,0 n/a 3,3
(____________________________________________________________________)
(1 )The comparable pro forma earnings per share does not contain amortisation
from fair value adjustments related to the acquisitions or their tax impact.
JUKKA RUUSKA, CEO
"In the first quarter of the financial year 2019, Asiakastieto Group grew in
accordance with our expectations. Net sales increased at comparable exchange
rates by 7,7 % to EUR 34,5 million. The Group's net sales grew particularly in
the consumer credit information services of the Risk Decisions business area in
both markets. In addition, the Group's net sales were increased by new service
launches, representing 4,4 % of net sales for the first quarter. However,
because of the integration phase, service development was less active compared
with previous quarters.
Adjusted EBITDA excluding IFRS 16 impact saw exceptionally strong growth of
22,4 % at comparable exchange rates, amounting to EUR 11,2 million. In addition
to the scalable business model, the increase was attributable to the
considerable decrease in IT expenses and the lower level of personnel expenses,
which was due to efficiency improvement measures and the high number of
vacancies.
The year 2019 has started off with positive expectations. Our customers' need to
utilise our services in their business decisions continues to increase. Thanks
to our strong market position, reliable brands and customer-driven services, our
situation is advantageous. After the intensive integration phase, we have once
again been able to concentrate on developing our services, providing even better
customer service and improving the customer experience.
We measure the success of integration in three areas in accordance with our
strategic themes: Skilled and competent personnel, improvement of customer
experience and efficient service development. Originally, we estimated that at
least EUR 17 million of cost, sales and investment synergies will be achieved
through the integration by the end of 2021, and the achievement of this
objective is advancing in accordance with the integration plan.
In 2019, Asiakastieto's Real Estate and Collateral Information Services will
expand into housing information services, services related to apartment exchange
and price estimation services for banks. We will introduce in the Finnish market
a service similar to the Tambur service portal that is already in use in
Sweden. This service allows real estate agencies and banks to exchange
information and conclude deals through a joint service portal, instead of having
to make phone calls, send emails and have meetings. The similar service has
been a great success in Sweden: it saves a significant amount of time for real
estate agencies and banks, and there is no need to go to the bank's office to
conclude a deal.
In addition, service development has focused on services that take advantage of
the new EU Payment Services Directive (PSD2) and on building Income
Intelligence, a service related to the processing of income information.
Launched in early 2019, Income Intelligence is a machine learning-based solution
for the verification of income information for loan applications, among other
uses.
The development of a uniform company culture began in 2018 and continues in
2019. To carry out this work in practice, we have established a company culture
team. Its objective this spring is to create a proposal for the company's joint
values and policies to be applied in our everyday work, both internally and in
encounters with customers and partners.
We defined the material themes of our corporate responsibility in 2018 as
follows: maintaining trust in the market, having a needs-driven and continuously
evolving product and service offering, improving competitiveness, being
perceived as an attractive investment and being a good corporate citizen. In
accordance with our stock exchange release we will publish a report of our non-
financial information for 2018 on our investor pages latest by the end of June
2019. In addition to acting responsibly as a company, it is important for us to
help our customers to act responsibly and sustainably by launching services that
support corporate responsibility."
FUTURE OUTLOOK
Net sales: Asiakastieto Group expects its net sales growth in 2019 to be in the
middle of the range of its long-term target (5-10 %) or slightly below it
compared to the previous year's pro forma net sales.
EBITDA: Asiakastieto Group expects its adjusted EBITDA, excluding the effect of
IFRS 16 transition, to grow in 2019 at a percentage rate that exceeds the rate
of net sales growth compared to the previous year's pro forma adjusted EBITDA.
Capital expenditure: Asiakastieto Group expects its capitalised product
development and software expenses in 2019 to exceed the previous year's level on
a pro forma basis.
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 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, 10 May 2019
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 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 pro
forma annual net sales for 2018 was EUR 134 million and the number of employees
was approximately 450. 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.
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