Netum Group Oyj | Company announcement | 20 August 2024 at 8.00 a.m. EEST
Netum Group Plc's half-year report 1.1.-30.6.2024: Revenue for January-June 2024 grew 33.1 %, EBITA 10.2 % of revenue
This release is a summary of Netum's half-year report for January-June 2024. The complete report is attached to this release and available on the company's website at https://www.netum.fi/en/investors/reports-and-presentations/.
Unless otherwise stated, the figures in brackets refer to the comparison period and are in the same unit as the figures for the review period. The figures for 2024 included in this half-year report are unaudited.
April-June 2024 in brief
- Revenue increased 31.0 % on the comparison period and was EUR 11.3 (8.7) million
- EBITDA was EUR 0.9 (0.2) million or 8.2 (2.9) % of revenue
- EBITA was EUR 0.9 (0.1) million or 7.9 (1.6) % of revenue
- Comparable EBITA was EUR 0.9 (0.3) million or 8.0 (3.3) % of revenue
- Operating profit was EUR 0.1 (-0.4) million or 0.7 (-5.2) % of revenue
- Result for the period was EUR -0.3 (-0.6) million or -2.6 (-6.4) % of revenue
January-June 2024 in brief
- Revenue increased 33.1 % on the comparison period and was EUR 22.8 (17.1) million
- EBITDA was EUR 2.4 (1.2) million or 10.5 (6.9) % of revenue
- EBITA was EUR 2.3 (1.0) million or 10.2 (5.7) % of revenue
- Comparable EBITA was EUR 2.3 (1.2) million or 10.1 (7.1) % of revenue
- Operating profit was EUR 0.7 (-0.1) million or 3.0 (-0.6) % of revenue
- Result for the period was EUR -0.2 (-0.3) million or -0.8 (-1.8) % of revenue
- Earnings per share were EUR -0.01 (-0.03)
- Number of personnel at the end of the period was 407 (323)
Group key figures
| EUR thousand unless otherwise stated | 4-6/2024 | 4-6/2023 | Change | 1-6/2024 | 1-6/2023 | Change | 1-12/2023 |
| Revenue | 11,346 | 8,662 | 31.0 % | 22,775 | 17,106 | 33.1 % | 37,069 |
| Revenue growth, per cent | 31.0 % | 15.1 % | 33.1 % | 10.9 % | 27.2% | ||
| Organic growth, per cent | 4.9 % | 10.0 % | 6.0 % | 6.2 % | 11.3% | ||
| EBITDA | 935 | 248 | 276.8 % | 2,388 | 1,175 | 103.3 % | 2,614 |
| EBITDA, % of revenue | 8.2 % | 2.9 % | 10.5 % | 6.9 % | 7.1% | ||
| Operating profit excluding goodwill amortisation (EBITA) | 901 | 140 | 544.2 % | 2,324 | 974 | 138.6 % | 2,341 |
| EBITA, % of revenue | 7.9 % | 1.6 % | 10.2 % | 5.7 % | 6.3% | ||
| Comparable EBITA1) | 913 | 286 | 219.4 % | 2,303 | 1,214 | 89.7 % | 2,754 |
| Comparable EBITA, % of revenue | 8.0 % | 3.3 % | 10.1 % | 7.1 % | 7.4% | ||
| Operating profit (-loss) | 84 | -446 | 118.9 % | 693 | -104 | 765.9 % | -235 |
| Operating profit (-loss), % of revenue | 0.7 % | -5.2 % | 3.0 % | -0.6 % | -0.6% | ||
| Result for the reporting period | -293 | -559 | 47.6 % | -180 | -315 | 42.9 % | -1,075 |
| Result for the reporting period, % of revenue | -2.6 % | -6.4 % | -0.8 % | -1.8 % | -2.9 % | ||
| Earnings per share, EUR | -0.01 | -0.03 | -0.09 | ||||
| Return on equity, % | -1.4 % | -5.6 % | -8.7% | ||||
| Equity ratio, % | 40.0 % | 47.5 % | 38.9% | ||||
| Number of employees at the end of the period | 407 | 323 | 26.0 % | 412 |
1) Items affecting comparability are presented in the table Comparable EBITA.
Outlook for 2024 unchanged
Netum expects 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 correct the cost structure to improve profitability.
Matti Mujunen, CEO:
"Netum's business continued its positive development during the second quarter of 2024. Our revenue increased to EUR 11.3 million, or by 31 per cent year-on-year. Organically, revenue grew by 4.9 per cent. The growth in revenue was supported by acquisitions completed last year, strong demand from existing customers and an increase in invoicing rates.
Revenue developed strongly, especially in Studyo Ltd's and Buutti Ltd's businesses and Netum Ltd's Digital services. During the review period, we acquired approximately 40 new customers. Profitability also continued to develop positively. EBITA for the second quarter was EUR 0.9 million (7.9 % of revenue), compared to EUR 0.1 million (1.6 %) in the comparison period. In addition to revenue growth, the strengthening of profitability was attributable to the changes to our cost structure and measures to reduce overheads we implemented in 2023.
We have continued to develop our sales operations by, for example, enhancing the sales cooperation of our subsidiaries, deepening our customer and industry knowledge and systematising the use of our partner network. Our customers' satisfaction with our services and operations is high; the NPS was 68 at the end of June.
During the first half of the year, we updated our medium-term financial targets and strategy, which were published in late May. We want to be the most trusted partner in our industry and the most sought-after work community in responsible and safe digital transformation. We will continue on the path of profitable growth; our goal is to grow our revenue organically by 30 % in the strategy period 2025-2027 and achieve an annual EBITA level of at least 12 %. In particular, we will seek additional growth from public service efficiency improvement projects and the business sector. In developing our service offering, we will be investing heavily in the use of artificial intelligence in the services we offer our customers. We recognise the potential of AI to create significant added value for our customers, improve our operational efficiency and support our growth. The deeper integration of AI into our business operations is, therefore, a central part of our strategy and will be an essential part of our culture in the future. In our sustainability work, we have prepared for CSRD reporting by conducting a double materiality assessment, which defines the areas of responsibility that are important to us.
There is still demand for IT development services in public services, but the outlook is twofold. While the numerous digitalisation projects in the Government Programme create positive expectations, the austerity measures already initiated will slow down customers' decision-making and will have a negative impact on demand in the near future. In the social welfare and healthcare market, the organisation of service financing continues to pose challenges, which is reflected in delays in the progress of projects. We are seeing a slight recovery in demand in the corporate sector.
Although we are well employed by our current customers and have gained a record number of new customers, the planned savings in public services will create uncertainty for the rest of the year. We expect our revenue to continue to grow both organically and inorganically and our profitability development to remain strong. In 2024, we still estimate revenue to be EUR 45-49 million and comparable EBITA to be approximately 8-11 per cent of revenue.
I would like to extend my warmest thanks to all of our employees, customers, partners and investors for a successful first half of the year."
Webcast for investors and media
Netum will hold a press conference in Finnish today, Tuesday 20 August 2024 at 2.00 p.m. EEST. The result will be presented by CEO Matti Mujunen. The press conference can be followed as a live webcast at https://netum.videosync.fi/q2-2024. During the webcast, the public can place questions through the webcast chat function. A recording of the webcast will be available on the company's website at https://www.netum.fi/en/investors/reports-and-presentations/ later that day.
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 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 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
