ENENTO GROUP PLC, STOCK EXCHANGE RELEASE 13 FEBRUARY 2023 AT 12.00 A.M. EET
Enento Group’s Financial Statement release 1.1. – 31.12.2022: Year ending with continued positive profitability development
SUMMARY
October – December 2022 in brief
- Net sales amounted to EUR 42,9 million (EUR 43,1 million), a decrease of 0,4 % (at comparable exchange rates an increase of 4,1 %).
- Adjusted EBITDA excluding items affecting comparability was EUR 16,0 million (EUR 14,6 million), an increase of 9,0 % (at comparable exchange rates increase of 13,4 %).
- Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to acquisitions was EUR 13,3 million (EUR 12,1 million), an increase of 9,5 %.
- Operating profit (EBIT) was EUR -0,5 million (EUR 7,8 million). Operating profit included amortisation from fair value adjustments of EUR -2,8 million (EUR -3,2 million) related to acquisitions. The operating profit was negatively impacted by the write-down of platform development investments of EUR -10,9 million, included in items affecting comparability. In addition, the items impacting comparability totalling to EUR -11,0 million (EUR -1,2 million) included payments related to restructuring and integration
- New services represented 4,0 % (7,4 %) of net sales.
- Free cash flow amounted to EUR 10,5 million (EUR 10,0 million). The effect of items affecting comparability on free cash flow was EUR -0,1 million (EUR -0,1 million).
- Earnings per share was EUR -0,08 (EUR 0,22).
- Comparable earnings per share were EUR 0,02 (EUR 0,33)1.
- Enento decided to write down partially the platform development investments, resulting in a one-time negative impact of EUR 10,9 million on the company’s operating profit.
January – December 2022 in brief
- Net sales amounted to EUR 167,5 million (EUR 163,5 million), an increase of 2,5 % (at comparable exchange rates an increase of 5,1 %).
- Adjusted EBITDA excluding items affecting comparability was EUR 61,2 million (EUR 59,1 million), an increase of 3,6 % (at comparable exchange rates an increase of 5,9 %).
- Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to acquisitions was EUR 49,1 million (EUR 49,0 million), an increase of 0,2 %. Adjusted EBIT includes an impairment and reversal of work-in-progress of EUR 1,6 million relating to Tambur service due to future transfer of the service.
- Operating profit (EBIT) was EUR 25,8 million (EUR 35,2 million). Operating profit included amortisation from fair value adjustments of EUR -11,8 million (EUR -12,7 million) and items affecting comparability of EUR -11,5 million (EUR -1,1 million), arising mainly from write-downs of platform development investments and including also expenses related to restructuring and integration. Operating profit also includes the above mentioned Tambur service related impairment.
- New products and services represented 4,6 % (7,3 %) of net sales.
- Free cash flow amounted to EUR 33,9 million (EUR 29,8 million). The effect of items affecting comparability on free cash flow was EUR -0,4 million (EUR -0,3 million).
- Earnings per share were EUR 0,72 (EUR 1,08).
- Comparable earnings per share were EUR 1,11 (EUR 1,49)1.
- Board of Directors propose EUR 1,00 per share distribution of funds to the Annual General Meeting
1 The comparable earnings per share does not contain amortisation from fair value adjustments related to acquisitions or their tax impact.
KEY FIGURES
| EUR million | 1.10. – 31.12.2022 |
1.10. – 31.12.2021 |
1.1. – 31.12.2022 | 1.1. – 31.12.2021 |
|||
| Net sales | 42,9 | 43,1 | 167,5 | 163,5 | |||
| Net sales growth, % (comparable fx rates) | 4,1 | 6,0 | 5,1 | 5,9 | |||
| Net sales growth, % (reported fx rates) | -0,4 | 7,2 | 2,5 | 8,1 | |||
| Operating profit (EBIT) | -0,5 | 7,8 | 25,8 | 35,2 | |||
| EBIT margin, % | -1,2 | 18,0 | 15,4 | 21,6 | |||
| Adjusted EBITDA | 16,0 | 14,6 | 61,2 | 59,1 | |||
| Adjusted EBITDA margin, % | 37,2 | 34,0 | 36,6 | 36,2 | |||
| Adjusted operating profit (EBIT) | 13,3 | 12,1 | 49,1 | 49,0 | |||
| Adjusted EBIT margin, % | 30,9 | 28,1 | 29,3 | 30,0 | |||
| New services of net sales, % | 4,0 | 7,4 | 4,6 | 7,3 | |||
| Free cash flow | 10,5 | 10,0 | 33,9 | 29,8 | |||
| Net debt to adjusted EBITDA, x | 2,2 | 2,4 | 2,2 | 2,4 | |||
FUTURE OUTLOOK
The general macroeconomic environment remains uncertain and unpredictable and is expected to impact negatively on the growth outlook of the Group. The weakening demand for sales and marketing and direct-to-consumer services is expected to negatively impact the net sales development. Enento expects increased demand for risk management and compliance services, which together with the introduction of new services will offset the decline. The discontinuance of the Swedish housing transaction service Tambur from second quarter onwards is estimated to have a negative impact up to -1.5% of the Group’s net sales at comparable exchange rates.
Enento expects cost inflation to increasingly burden the profitability level of the Group and is mitigating the impact by the introduction of the efficiency program.
GUIDANCE
Net Sales: Enento Group expects net sales in 2023 to grow between 0% – 5% excluding the impact from the discontinued Tambur service at comparable exchange rates as compared to 2022.
Adjusted EBITDA: Enento Group expects its adjusted EBITDA margin to be in the range of 36,0% – 37,0%.
Comparable exchange rates mean that the effects of any changes in currencies are eliminated by calculating the figures for the previous period using current period’s exchange rates.
JEANETTE JÄGER, CEO
I am pleased to report that our company had a successful year, achieving strong financial results and making considerable progress towards our key goals and initiatives.
Enento’s year ended with moderate growth, and during the fiscal year our net sales increased by 5,1 % at comparable exchange rates and our adjusted EBITDA reached a new record level and increased by 5,9 % at comparable exchange rates. The results were in line with our long-term financial targets. Thanks to our resilient and scalable business model, our business has adapted well to the diverse impacts of the economic uncertainty around us.
Our revenue grew in line with our expectations in the final quarter of 2022. The Group’s net sales amounted to EUR 42,9 million, representing year-on-year growth of 4,1 % at comparable exchange rates. Adjusted EBITDA increased by 13,4 % at comparable exchange rate and amounted to EUR 16,0 million. The Group’s adjusted EBIT increased by 14,0 % at comparable exchange rates and amounted to EUR 13,3 million. The share of new services followed the recent development trend and was 4,0 % during the period under review.
Net sales increased in Consumer Insight and Business Insight business areas in the fourth quarter. Yet again, the net sales development was particularly supported by the strong demand for consumer credit information services in Finland and Sweden. In the Business Insight business area, we saw strong quarters from Premium and Freemium Solutions, while the net sales in Enterprise Solutions increased moderately compared to the reference period. The net sales of real estate and collateral information services at Digital Processes was clearly below comparison period, following the declining housing markets in Finland and Sweden, while Compliance services continued with significant growth compared to year before.
The year 2022 started with the hope that the pandemic would finally be over and that we could start a new and lighter phase in the world, but unfortunately the operating environment did not become easier. Despite the macroeconomic crises we are now facing, we have continued our journey to become the Nordic knowledge company. Some of our key accomplishments in the past year include launching several strategic services, such as the daily credit register in Sweden that has been well-received by customers, and the new ESG report in Sweden and improved sustainability offering in Finland. We have also increased our Nordic presence and customer base especially in Norway and Denmark. As we strive to achieve greater efficiency and productivity throughout our organization, we have continued investing in modern technologies and processes, with the goal of realizing synergies of scale. We are again certified as a Great Place to Work and our customers, both consumers and companies, have given us excellent scores in customer satisfaction surveys. Our operations in Finland and Sweden have been audited and our ISO quality certification remains valid. These achievements, along with others, have contributed to a strong financial outcome for the year.
Of course, we also faced some challenges during the past year, including increasing cost pressure and market volatility. In December, one of our IT vendors in Sweden had an IT incident, which unfortunately impacted some of our online services for a brief period. However, we can be proud of how hard we worked as a team to solve the incident and minimize any damage to our customers. Overcoming obstacles gives me great confidence in our ability to continue delivering value to our customers and shareholders.
Looking ahead, we anticipate that 2023 will be a challenging year in terms of both growth and profitability. We announced an efficiency program to strengthen the long-term value creation, the execution of the transformation program, and to secure profitability development in the coming years. This initiative, together with the reshaped Nordic Business Platform program, is striving for permanent improvements in our cost structure, which are necessary for us to strengthen the foundation for future growth. Still, maintaining stability and availability of our services is of paramount importance to us and we are committed to ensure the security of our services. Besides activities around Operational Excellence, our priority during 2023 is to have Customer First in everything we do as we aim for a superior customer experience. Our ability to reach scale on a Nordic level will improve as we are focused on developing our Nordic culture, integration and offering as One Enento. We also prioritize the development and growth of our employees, fostering a culture of learning and innovation within the organization.
We continued to deliver growth and resilient results while we went through significant changes and the operating environment continued to be unpredictable. Our financial guidance for 2023 considers the continuing uncertainty in the operating environment, but our long-term financial targets remain unchanged, and we continue to target profitable growth according to these targets. In addition, the Board of Directors proposes distribution of funds of EUR 1.00 per share to the Annual General Meeting.
Overall, we are proud of what we have accomplished in the past year, and we are excited about the opportunities and challenges that lie ahead. I would like to thank our employees, customers and shareholders for your continued support and confidence in our company.
WEBCAST AND CONFERENCE CALL
Webcast for analysts, investors and media will be arranged on Monday, February 13, 2023, starting at 2.00 p.m. (EET). CEO Jeanette Jäger and CFO Elina Stråhlman will present the results in English.
The webcast can be followed at:
https://cloud.webcast.fi/enento/enento_2023_0213_q4
To participate in the conference call, please dial in using one of the numbers below:
Finland: +358 9 2319 5437
Sweden: +46 (0) 8 50520424
UK: +44 (0) 33 0551 0200
United States, local: +1 786 697 3501
Participant passcode: 181982
The presentation material and the webcast recording will be available on Enento’s investor website. The event is virtual and cannot be attended on-site.
Helsinki, 13 February 2023
ENENTO GROUP PLC
Board of Directors
For further information:
Jeanette Jäger
CEO
Tel. +46 72 141 00 00
Distribution:
Nasdaq Helsinki
Major media
enento.com/investors
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 447 people are working for Enento Group in Finland, Norway, Sweden, and Denmark. The Group’s net sales for 2022 was 167.5 MEUR. Enento Group is listed on Nasdaq Helsinki with the trading code ENENTO.