Panostaja Oyj Financial Statement Bulletin December 15, 2023 at 9.00 a.m.
Focusing on measures to improve profitability
August 2023-October 2023 (3 months) in brief:
- Net sales increased in two out of four segments. Net sales for the Group as a whole dropped by 7.1% to MEUR 34.2 (MEUR 36.8).
- EBIT improved in two of the four segments. The entire Group's EBIT declined from the reference period, standing at MEUR -0.8 (MEUR -0.6).
- Grano's net sales for the review period dropped by 6.2% from the reference period. EBIT totaled MEUR 0.2 (MEUR -0.5). Grano's EBIT includes MEUR 0.4 in one-time costs of the restructurings that resulted from the change negotiations that took place at the end of the financial period.
- Earnings per share (undiluted) were -1.4 cents (-1.1 cents).
November 2022-October 2023 (12 months) in brief:
- Net sales increased in two out of four segments. Net sales for the Group as a whole dropped by 1.3% to MEUR 136.2 (MEUR 137.9).
- EBIT improved in two of the four segments. The entire Group's EBIT declined from the reference period, standing at MEUR -1.1 (MEUR 5.2). The EBIT for the reference period includes MEUR 9.4 in sales profit from the SokoPro deal.
- Comparable EBIT improved for three of the four segments (Grano adjusted with the impacts of the SokoPro divestment).
- Grano's net sales for the review period dropped by 2.2% from the reference period. EBIT was MEUR 1.9 (MEUR 8.7 including the SokoPro sales profit of MEUR 9.4). Net sales for the review period decreased by 0.7% from the reference period net sales that were adjusted based on the SokoPro sale.
- Earnings per share (undiluted) were -5.5 cents (2.5 cents).
Proposal for the distribution of profits: The Board of Directors proposes to the Annual General Meeting to the held on February 7, 2024 that no dividend be distributed for the financial period that concluded on October 31, 2023.
CEO Tapio Tommila:
"As a whole, Panostaja's 2023 financial period progressed in a fairly bifurcated manner. In the first half of the year, our demand was largely stable and the business operations of our segments developed quite positively. In the second half, in turn, demand began to decline, which had a negative impact on net sales development especially at Grano, which is our largest segment. From the start, our focus in the financial period was on improving the profitability of business, and we succeeded in pushing the profitability measures forward across a wide spectrum. That said, our profitability development in the second half were challenged by Grano's declined demand and CoreHW's substantially weaker project profitability, as significantly more resources than planned had to be tied up in important customer projects.
Despite the difficulties, we have been determined in tackling the challenges at our segments, and the change negotiations carried out at Grano will provide us with consistent cost efficiency and the opportunity to safeguard our profitability in a flexible manner, even in more challenging demand situations. At Hygga, we have succeeded in improving profitability to a considerable degree, and the profitability of Oscar Software has developed in the right direction, despite the moderate level of the growth. At CoreHW, we are carrying out an initiative to improve project profitability and expect to see results starting from the first quarter of the next financial period.
During the review period, we carried out a substantial additional investment in the development and commercialization of CoreHW's own product business by allocating almost MEUR 4 in extra funding to bolstering the product development and commercialization measures of the indoor positioning solutions. Our clear goal is to achieve significant sales volumes for component products in the new financial period.
The Board of Directors proposes that no dividends be paid for the financial period that has now ended. Pursuant to our strategy, we will be looking for new investments in the current strategy period, and we estimate that it is important for the overall profit of our shareholders to maintain a high investment capacity in the present market climate. The number of deals closed in the corporate acquisition market has dropped substantially from the high levels of recent years, but our projects have been of high quality. We expect the differences in value expectations that have slowed down our discussions will start to dissipate gradually. For our part, we will continue to actively explore corporate acquisition opportunities in our own target sectors.
We will begin the new financial period with clear goals. Our priorities are continuing to improve and accelerate Grano's profitability and securing profitable growth across our other segments. Our focuses are growing the continuously invoiced software at Oscar Software and Hygga and commercializing the product business at CoreHW. In accordance with our strategy, we strive to add new value-adding segments to our portfolio."
Financial Development November 1, 2022-October 31, 2023
| Key Figures MEUR | Q4 | Q4 | 12 months | 12 months |
| 8/23- 10/23 | 8/22- 10/22 | 11/22- 10/23 | 11/21- 10/22 | |
| Net sales, MEUR | 34.2 | 36.8 | 136.2 | 137.9 |
| EBIT, MEUR | -0.8 | -0.6 | -1.1 | 5.2 |
| Profit before taxes, MEUR | -2.3 | -1.2 | -4.3 | 3.2 |
| Profit/loss for the financial period, MEUR | -1.4 | -1.0 | -3.6 | 3.9 |
| Distribution: | ||||
| Shareholders of the parent company | -0.8 | -0.6 | -2.9 | 1.3 |
| Minority shareholders | -0.7 | -0.4 | -0.8 | 2.6 |
| Earnings per share, undiluted, EUR | -0.014 | -0.012 | -0.055 | 0.025 |
| Interest-bearing net liabilities | 42.4 | 42.3 | 42.4 | 42.3 |
| Gearing ratio, % | 80.5 | 72.8 | 80.5 | 72.8 |
| Equity ratio, % | 37.5 | 39.1 | 37.5 | 39.1 |
| Equity per share, EUR | 0.62 | 0.71 | 0.62 | 0.71 |
| Distribution of net sales by segment MEUR | Q4 | Q4 | 12 months | 12 months |
Net sales | 8/23- 10/23 | 8/22- 10/22 | 11/22- 10/23 | 11/21- 10/22 |
| Grano | 27.9 | 29.8 | 109.1 | 111.5 |
| Hygga | 2.0 | 1.7 | 7.8 | 7.3 |
| CoreHW | 1.5 | 2.6 | 7.9 | 8.0 |
| Oscar Software | 2.8 | 2.8 | 11.5 | 11.2 |
| Others | 0.0 | 0.0 | 0.0 | 0.0 |
| Eliminations | 0.0 | 0.0 | -0.1 | -0.1 |
| Group in total | 34.2 | 36.8 | 136.2 | 137.9 |
| Distribution of EBIT by segment MEUR | Q4 | Q4 | 12 months | 12 months |
EBIT | 8/23- 10/23 | 8/22- 10/22 | 11/22- 10/23 | 11/21- 10/22 |
| Grano | 0.2 | -0.5 | 1.9 | 8.7 |
| Hygga | 0.0 | 0.1 | -0.1 | -0.4 |
| CoreHW | -0.6 | 0.5 | -1.2 | -0.5 |
| Oscar Software | 0.2 | -0.1 | 0.4 | -0.5 |
| Others | -0.5 | -0.6 | -2.2 | -2.2 |
| Group in total | -0.8 | -0.6 | -1.1 | 5.2 |
Panostaja Group's business operations for the current review period are reported in five segments: Grano, Hygga, CoreHW, Oscar Software and Others (parent company and associated companies).
One associated company, Gugguu Group Oy, provided a report for the review period. The impact on profit/loss of the reported associated companies in the review period was MEUR -0.1 (MEUR -0.1), which is presented in a separate row in the consolidated income statement. The development of Gugguu's net sales and EBIT has been commented on more specifically in the Segments section.
Outlook for the 2024 Financial Period
As regards the corporate acquisition market, new opportunities are available and the market is active.SMEs will still need to utilize ownership arrangements and growth opportunities, but the consistently high market liquidity and the high price expectations of sellers, which tend to follow changes in economic trends with some delay, make the operating environment challenging for corporate acquisitions.We will continue exploring new possible investment targets in accordance with our strategy and assess divestment possibilities as part of the ownership strategies of the investment targets.
It is thought that the demand situation for different investments will develop in the short term as follows:
- The demand for Grano, Oscar Software, CoreHW and Hygga will remain satisfactory.
The demand situation presented above involves uncertainties relating to any geopolitical and macroeconomic impacts that are difficult to anticipate. The effects of the war in Ukraine and the related economic sanctions and geopolitical tensions will increase economic uncertainty in Finland and abroad, which may negatively impact segment demand or the availability of materials, and thereby material prices and delivery capabilities. If strengthened and prolonged, the inflation may have a negative impact on the purchasing power of consumers and the willingness of companies to make investments, which may weaken the demand situation of our segments from the estimate provided above.
Panostaja Oyj
Board of Directors
For further information, contact CEO Tapio Tommila, +358 (0)40 527 6311
Panostaja Oyj
Tapio Tommila
CEO
Panostaja is an investment company developing Finnish companies in the growing service and software sectors as an active shareholder. The company aims to be the most sought-after partner for business owners selling their companies as well as for the best managers and investors. Together with its partners, Panostaja increases the Group's shareholder value and creates Finnish success stories.
Panostaja has a majority holding in four investment targets. Grano Oy is the most versatile expert of content services in Finland. Hygga Oy is a company providing health care services and the ERP system for health care providers. CoreHW provides high added value RF IC design services. Oscar Software provides ERP systems and financial management services.
