ENENTO GROUP PLC, INSIDE INFORMATION ON 26 JANUARY 2023 AT 9.00 A.M. EET
Enento Group announces an 8-million-euro annualized efficiency program, write-downs of platform development investments and confirms guidance for 2022, long-term financial targets
To strengthen long-term value creation, the execution of the transformation program, and to secure profitable growth in the coming years, Enento is launching an efficiency program. The program also aims at mitigating the impact of weakening macro environment. The efficiency program targets EUR 8 million in annual efficiencies by 2025.
The efficiency program consists of strategic and operational initiatives to improve profitability in accordance with the company’s long-term financial targets. The long-term financial targets of Enento Group remain intact where Enento over time aims for 5-10 percent annual revenue growth and with Adjusted EBITDA growth rate exceeding revenue growth rate. Enento also confirms the outlook and guidance for 2022, announced on 28 April 2022.
In previous years, Enento has made significant investments into building new capabilities with expectations for substantial future benefits. With current market outlook for the midterm being challenging and uncertain, Enento does not expect these benefits being realized as initially planned. As a result, Enento will write-down part of the investments made mainly to the platform development.
“Our long-term growth strategy remains intact. We continue to aim for profitable growth over time in accordance with our financial targets and the efficiency program will be a key enabler for this ambition. The efficiency program will improve the cost structure of the group and thereby provide a foundation for future growth.”, Enento Group CEO Jeanette Jäger states.
Program content and goals
The program aims for efficiencies of at least EUR 8 million in total during 2023-2024. Full amount of the estimated benefits will be realized in free cash flow from 2025 onwards. More than half of the EUR 8 million benefits will result as permanent improvement in the adjusted EBITDA, whereas the remaining cash flow benefits materialize as reduced capitalized expenditure and facility costs. The largest efficiency measures relate to reduction of number of employees and improved IT efficiency and decommissioning of low-profitability products and services.
As part of the program, Enento will start change negotiations in Finland, Sweden, and Norway in accordance with the respective local legislations. The aim of the negotiations is to permanently adjust the company’s cost structure and number of personnel to meet the demand of the changed market situation. The negotiations concern all employees in the respective countries and the estimated need for permanent personnel reductions is approximately 40 people. The aim is to conclude the negotiations during the first quarter of 2023 in all countries.
Enento has decided to write-down partially the platform development investments, resulting in a one-time negative impact of approximately EUR 10 million on the company’s operating profit of 2022. The write-down will impact the last quarter of 2022 and has no effect on cash flow, adjusted operating profit (adjusted EBIT) or adjusted EBITDA.
Enento will communicate on the progress of the efficiency program on a quarterly basis as part of its regular financial reporting. The restructuring and other direct costs connected to the program will be treated as items affecting comparability. Investments that meet capitalization criteria will be treated as normal investments.
ENENTO GROUP PLC
For further information:
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Enento Group is a Nordic knowledge company powering society with intelligence since 1905. We collect and transform data into intelligence and knowledge used in interactions between people, businesses, and societies. Our digital services, data and information empower companies and consumers in their daily digital decision processes, as well as financial processes and sales and marketing processes. Approximately 449 people are working for Enento Group in Finland, Norway, Sweden, and Denmark. The Group’s net sales for 2021 was 163.5 MEUR. Enento Group is listed on Nasdaq Helsinki with the trading code ENENTO.