Netum Group Plc Company announcement 7 May 2024 at 08:00 a.m. EEST
Netum Group Plc: Netum Group Plc's business review 1 January-31 March 2024
This release is a summary of Netum's business review for January-March 2024. The complete report is attached to this release as a pdf file and available on the company's website at https://www.netum.fi/en/investors/reports-and-presentations/
Turnaround in profitability proceeded according to plan
Unless otherwise stated, the figures in parenthesis refer to the comparison period and are in the same unit as the figures for the review period. The figures for 2024 contained in this financial statements release are unaudited.
January-March 2024 in brief
· Revenue increased 35.4% on the comparison period and was EUR 11.4 (8.4) million. Organic growth was 7.1 %.
· EBITDA was EUR 1.5 (0.9) million or 12.7 (11.0) % of revenue
· EBITA was EUR 1.4 (0.8) million or 12.4 (9.9) % of revenue
· Comparable EBITA was EUR 1.4 (0.9) million or 12.2 (11.0) % of revenue
· Operating profit was EUR 0.6 (0.3) million or 5.3 (4.1) % of revenue
· Result for the period was EUR 0.1 (0.2) million or 1.0 (2.9) % of revenue
· Number of personnel at the end of the period was 393 (298)
Group key figures
EUR thousand unless otherwise stated | 1-3/2024 | 1-3/2023 | Change | 1-12/2023 |
Revenue | 11,429 | 8,443 | 35.4% | 37,069 |
Revenue growth, per cent | 35.4% | 6.9% | 27.2% | |
Organic growth, per cent | 7.1% | 2.7% | 11.3% | |
EBITDA | 1,453 | 927 | 56.8% | 2,614 |
EBITDA, % of revenue | 12.7% | 11.0% | 7.1% | |
Operating profit excluding goodwill amortisation (EBITA) | 1,423 | 834 | 70.6% | 2,341 |
EBITA, % of revenue | 12.4% | 9.9% | 6.3% | |
Comparable EBITA1) | 1,390 | 928 |
49.8% | 2,754 |
Comparable EBITA, % of revenue | 12.2% | 11.0% | 7.4% | |
Operating profit (-loss) | 609 | 342 | 77.8% | -235 |
Operating profit (-loss), % of revenue | 5.3% | 4.1% | -0.6% | |
Result for the reporting period | 113 | 244 | -53.7% | -1,075 |
Result for the reporting period, % of revenue | 1.0% | 2.9% | -2.9% | |
Number of employees at the end of the period | 393 | 298 | 31.9% | 412 |
1) Items affecting comparability are presented in the table Comparable EBITA.
Outlook for 2024 unchanged
Netum continues to expect its revenue in the financial year 2024 to be EUR 45-49 million and comparable EBITA to be approximately 8-11 % of revenue.
Netum expects the demand for IT services in the public sector to remain strong but the intensified price competition to bring challenges to the market. The outlook for the corporate sector is weighed down by the general economic situation, which slows down decision-making. Netum expects the measures started during 2023 to improve profitability.
Matti Mujunen, CEO:
"Netum's year 2024 has started well. Our revenue grew strongly, and our profitability improved as expected. At the beginning of the year, we focused especially on sales development and new customer acquisition, as well as strategy and responsibility work.
Our revenue grew to EUR 11.4 million in the first quarter, i.e. 35 per cent from the comparison period. Organically, revenue increased by 7 percent. Revenue growth was supported by acquisitions completed last year, strong demand from existing customers and higher invoicing rates. Revenue development was strong especially in Studyo Oy's product business and in digital services. More than ten new customers were gained during the review period, and it was gratifying that a significant number of new customers came from the private sector.
Profitability started to grow in line with expectations. EBITA for the first quarter was EUR 1.4 million (12.4% of revenue), compared to EUR 0.8 million (9.9%) in the comparison period. In the fourth quarter of 2023, EBITA was 7.8 percent of revenue. In addition to revenue growth, the turnaround in profitability was impacted by the changes in our cost structure in the second half of 2023 and measures to reduce overhead costs.
During the current year, we have continued to develop our sales operations by, for example, streamlining the sales process and arranging sales training. We have also continued our artificial intelligence programme, which will help us concretely improve the efficiency of our processes and operations and create new customer added value. The development of our sustainability work will also continue. We are preparing for CSRD reporting and have started by conducting a double materiality assessment that will define the sustainability areas that are important to us. In addition, we are currently updating our medium-term financial targets and strategy, and we aim to publish them towards the end of May.
Demand for public administration IT services remains strong, although cost-saving measures and announced personnel reduction plans in the sector may slow down customers' decision-making. In the health and social services market, the financing of services poses challenges. We see small signs of recovery in corporate sector demand.
Although we have received orders from our current customers, the planned savings in public administration will bring uncertainty towards the end of the year. We estimate that our revenue will continue to grow both organically and inorganically, and that the efficiency measures we have taken will significantly improve our profitability. In 2024, we still expect our revenue to be in the range of EUR 45-49 million and comparable EBITA to be approximately 8-11 per cent of revenue.
My warmest thanks for a successful first quarter to all our employees, customers, partners and investors."
For additional information, please contact:
Netum Group Plc
Matti Mujunen, CEO
+358 40 047 6401
matti.mujunen@netum.fi
Certified advisor:
Evli Plc
+358 40 579 6210
Netum Group in brief
Netum is a strongly and profitably growing IT service partner that builds a functional and secure digital society. We help our customers develop their digital business by designing and implementing sustainable digital solutions tailored to their needs - wisely and responsibly. Netum employs approximately than 400 people, and the company's revenue in 2023 was EUR 37.1 million. Netum Group Plc's shares are listed on Nasdaq Helsinki First North (NETUM). www.netum.fi
