Netum Group Plc | Company announcement | 5 November 2024 at 8.00 a.m. EET
Netum Group Plc's business review 1 January - 30 September 2024: Revenue for January-September 2024 grew 28.2%, EBITA 11.5% of revenue
This release is a summary of Netum's business review for January-September 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/.
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 business review are unaudited.
July-September 2024 in brief
- Revenue increased 17.8% on the comparison period and was EUR 9.7 (8.2) million. Organic growth was 3.5%.
- EBITDA was EUR 1.4 (0.5) million or 14.8 (5.9) % of revenue
- EBITA was EUR 1.4 (0.5) million or 14.5 (5.5) % of revenue
- Comparable EBITA was EUR 1.4 (0.7) million or 14.5 (8.2) % of revenue
- Operating profit was EUR 0.6 (-0.2) million or 6.1 (-2.1) % of revenue
- Result for the period was EUR 0.1 (-0.4) million or 1.0 (-5.2) % of revenue
January-September 2024 in brief
- Revenue increased 28.2% on the comparison period and was EUR 32.5 (25.3) million. Organic growth was 5.2%.
- EBITDA was EUR 3.8 (1.7) million or 11.8 (6.6) % of revenue
- EBITA was EUR 3.7 (1.4) million or 11.5 (5.6) % of revenue
- Comparable EBITA was EUR 3.7 (1.9) million or 11.4 (7.5) % of revenue
- Operating profit was EUR 1.3 (-0.3) million or 3.9 (-1.1) % of revenue
- Result for the period was EUR -0.1 (-0.7) million or -0.3 (-2.9) % of revenue
- Number of personnel at the end of the period was 397 (424)
Group key figures
| EUR thousand unless otherwise stated | 7-9/2024 | 7-9/2023 | Change | 1-9/2024 | 1-9/2023 | Change | 1-12/2023 |
| Revenue | 9,694 | 8,226 | 17.8% | 32,468 | 25,332 | 28.2% | 37,069 |
| Revenue growth, per cent | 17.8% | 38.8% | 28.2% | 18.6% | 27.2% | ||
| Organic growth, per cent | 3.5% | 19.1 % | 5.2% | 9.8% | 11.3% | ||
| EBITDA | 1,436 | 487 | 195.1% | 3,824 | 1,662 | 130.2% | 2,614 |
| EBITDA, % of revenue | 14.8% | 5.9% | 11.8% | 6.6% | 7.1% | ||
| Operating profit excluding goodwill amortisation (EBITA) | 1,403 | 450 | 211.6% | 3,727 | 1,424 | 161.7% | 2,341 |
| EBITA, % of revenue | 14.5% | 5.5% | 11.5% | 5.6% | 6.3% | ||
| Comparable EBITA1) | 1,409 | 675 | 108.7% | 3,711 | 1,889 | 96.5% | 2,754 |
| Comparable EBITA, % of revenue | 14.5% | 8.2% | 11.4% | 7.5% | 7.4% | ||
| Operating profit (-loss) | 589 | -172 | 1,281 | -276 | -235 | ||
| Operating profit (-loss), % of revenue | 6.1% | -2.1% | 3.9% | -1.1% | -0.6% | ||
| Result for the reporting period | 93 | -425 | -87 | -740 | -1,075 | ||
| Result for the reporting period, % of revenue | 1.0% | -5.2% | -0.3% | -2.9% | -2.9% | ||
| Number of employees at the end of the period | 397 | 424 | -6.4% | 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 third quarter of the financial year 2024 went very well. Our revenue grew strongly and our profitability improved as expected. During the quarter, we continued to focus particularly on the development of sales, the implementation of our strategy updated in May and the preparation and launch of our AI programme.
Our revenue for the third quarter increased to EUR 9.7 million, or by 17.8 per cent year-on-year. Organically, revenue grew by 3.5 per cent. The growth in revenue was supported by continued strong demand from existing customers, more efficient new customer acquisition and an increase in invoicing rates. Revenue developed strongly, especially in Studyo Oy's product business and Netum Ltd's digital services. More than ten new customers were secured during the review period, the most significant of which was the integration partnership agreement for the Tampere Region.
Profitability developed positively. EBITA for the third quarter was EUR 1.4 million (14.5% of revenue), compared to EUR 0.5 million (5.5% of revenue) 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.
In the third quarter, we continued to build a winning sales team. To support resource allocation and cross-selling of the Group's broad service offering, we started the implementation of a Group-wide competence management system, which will enter production use by the end of the year. As an important part of our updated strategy, we announced our AI programme spanning the entire strategy period 2025-2027. The programme defines the goals, operating model and means by which we aim to create new customer added value and earnings through continuous experimentation and learning and to concretely improve the efficiency of our processes and operations. In our sustainability work, we continued to prepare for CSRD reporting by conducting a double materiality assessment, which defines the areas of responsibility that are important to us.
Our revenue for January-September increased to EUR 32.5 million, or by 28.2 per cent year-on-year. The organic growth was 5.2 per cent. EBITA for January-September was EUR 3.7 million (11.5% of revenue), compared to EUR 1.4 million (5.6% of revenue) in the comparison period.
Demand for IT services in public services has remained relatively strong, although austerity measures and numerous change negotiations are slowing down customers' decision-making. In the social welfare and healthcare market, financing even critical projects seems to continuously pose challenges. Demand in the corporate sector is soft and there is no sign of a turnaround for the better yet. Public service austerity measures and weak demand in the corporate sector will continue to cause uncertainty during the remainder of the year. In addition, the timing of public holidays in December poses challenges in terms of profitability. In 2024, we still estimate revenue to be EUR 45-49 million and comparable EBITA to be approximately 8-11 per cent of revenue.
9 October 2024 Netum announced my decision to retire and the start of the selection of my successor. I am pleased to say that on 1 November 2024 the Board appointed Repe Harmanen as my successor. He has very diverse experience in the IT industry and has held roles from coder to CEO and Chairman of the Board. Repe has been a member of Netum's Board of Directors for over three years and therefore knows the company well. The upcoming transition will support the continuum of long-term development that is part of Netum's DNA. I am confident that on 10 January 2025 I will hand over my duties to Repe, as I know that people-oriented leadership will continue at Netum.
I would like to extend my warmest thanks to all of our employees, customers, partners and investors for a successful third quarter."
For further information, please contact:
Netum Group Plc
Matti Mujunen, CEO
+358 40 047 6401
matti.mujunen@netum.fi
Certified Adviser:
Evli Plc
+358 40 579 6210
Netum Group Plc
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/?
