Enento Group Plc | Stock Exchange Release | February 14, 2025 at 12:00:00 EET
SUMMARY
October – December 2024 in brief
- Net sales declined by 2,6% at comparable exchange rates (at reported exchange rates decrease of 2,9%) amounting to EUR 37,8 million (EUR 38,9 million).
- Adjusted EBITDA was EUR 11,7 million (EUR 13,4 million), a decrease of 12,6% (at comparable exchange rates decrease of 12,5%).
- Adjusted EBITDA margin was 30,9% (34,4%), a decrease of 3,5 pp (at comparable exchange rates decrease of 3,5 pp).
- Adjusted EBIT was EUR 8,4 million (EUR 10,5 million), a decrease of 19,9% (at comparable exchange rates decrease of 19,7%).
- Operating profit (EBIT) was EUR 4,3 million (EUR 5,9 million).
January – December 2024 in brief
- Net sales declined by 3,3% excluding the impact from the discontinued Tambur service at comparable exchange rates.
- Net sales amounted to EUR 150,4 million (EUR 155,9 million), a decrease of 3,5% (at comparable exchange rates decrease of 3,6%).
- Adjusted EBITDA was EUR 52,0 million (EUR 57,1 million), a decrease of 8,9% (at comparable exchange rates decrease of 9,0%).
- Adjusted EBITDA margin was 34,6% (36,6%), a decrease of 2,0 pp (at comparable exchange rates decrease of 2,0 pp).
- Adjusted EBIT was EUR 39,6 million (EUR 46,0 million), a decrease of 13,9% (at comparable exchange rates decrease of 13,9%).
- Operating profit (EBIT) was EUR 24,6 million (EUR 30,4 million).
- The efficiency program targeting at least 10-million-euro efficiencies by the end of 2024 reached more than 100% of the targeted efficiencies by the end of the fourth quarter.
- The Board of Directors propose to the Annual General Meeting a dividend of EUR 0,50 per share, followed by a second instalment of up to EUR 0,50 per share in November, subject to the Board decision.
In October-December 2024, the items affecting comparability amounted to EUR -2,2 million (-2,3 EUR million) and in January-December 2024 to EUR -7,0 million (-6,1 EUR million), including mainly restructuring and other efficiency program-related costs.
In October-December 2024, the amortization from fair value adjustments amounted to EUR -1,9 million (EUR -2,4 million) and in January-December 2024 to EUR -8,1 million (EUR -9,5 million).
KEY FIGURES
| 1.10. – | 1.10. – | 1.1. – | 1.1. – | |
| EUR million | 31.12.2024 | 31.12.2023 | 31.12.2024 | 31.12.2023 |
| Net sales | 37,8 | 38,9 | 150,4 | 155,9 |
| Net sales change, % (comparable fx rates) | -2,6 | -6,5 | -3,6 | -2,6 |
| Net sales change, % (reported fx rates) | -2,9 | -9,3 | -3,5 | -6,9 |
| Operating profit (EBIT) | 4,3 | 5,9 | 24,6 | 30,4 |
| EBIT margin, % | 11,5 | 15,1 | 16,3 | 19,5 |
| Adjusted EBITDA | 11,7 | 13,4 | 52,0 | 57,1 |
| Adjusted EBITDA margin, % | 30,9 | 34,4 | 34,6 | 36,6 |
| Adjusted operating profit (EBIT) | 8,4 | 10,5 | 39,6 | 46,0 |
| Adjusted EBIT margin, % | 22,2 | 27,0 | 26,4 | 29,5 |
| New services of net sales, %* | 16,3 | 12,2 | 15,6 | 12,2 |
| Free cash flow | 7,1 | 8,9 | 30,7 | 32,0 |
| Net debt to adjusted EBITDA, x | 2,7 | 2,4 | 2,7 | 2,4 |
| Earnings per share, EUR | 0,02 | 0,09 | 0,51 | 0,74 |
| Comparable earnings per share, EUR** | 0,09 | 0,17 | 0,78 | 1,05 |
* The share of new services of net sales is calculated as net sales of those services introduced within the past 36 months. The calculation formula has been revised from 1st January 2024 onwards. Before, the net sales of new services were calculated as net sales of those services introduced within the past 24 months. The comparison figures have been restated. With the previous calculation formula, the net sales from new services would have been in October-December 2024 EUR 1,7 million (EUR 3,3 million) and in January-December 2024 EUR 9,4 million (EUR 14,8 million). The share of new services of net sales-% would have been in October-December 2024 4,6% (8,5%) and in January-December 2024 6,2% (9,5%). See note 1 Alternative Performance Measures.
** Comparable earnings per share does not contain amortization from fair value adjustments related to acquisitions or their tax impact.
FUTURE OUTLOOK AND GUIDANCE
There are signs of a gradually improving macroeconomic situation and stabilization in the demand for mortgage and unsecured loans, and the demand for business information services remains good. However, the Swedish consumer credit market is facing structural changes and new regulatory developments. These are expected to impact Enento’s operating environment and financial performance in 2025. Enento remains focused on maintaining profitability and strengthening free cash flow through disciplined cost control, while simultaneously investing in future competitiveness and growth opportunities.
Enento Group expects that 2025 net sales will be around EUR 150-156 million and Adjusted EBITDA will be around EUR 50-55 million.
The guidance assumes that exchange rates remain at the current level.
JEANETTE JÄGER, CEO
In 2024, we demonstrated growth in Business Insight and new services, while also successfully completing the EUR 10 million Efficiency Program. The consumer credit market faced a challenging environment in both Sweden and Finland. Between 2022 and 2024, the consumer credit information net sales has decreased by around EUR 13 million in Sweden, which has had an impact on our profitability due to the high-margin and fixed-cost business model in Sweden. Given these circumstances, we have maintained solid profitability and free cash flow.
We continued to execute on our strategy. We launched several new services within fraud prevention, compliance and real estate. Additionally, we enhanced capabilities in AI, customer channels, distribution, and common product development. These improvements enable higher customer value and profitable growth.
Net sales for the fiscal year were EUR 150,4 million (EUR 155,9 million), representing a decrease of 3,6% at comparable exchange rates. In the fourth quarter of 2024, net sales totaled EUR 37,8 million (EUR 38,9 million), representing a decline of 2,6% at comparable exchange rates. In the second half of 2024, the markets showed signs of stabilization, resulting in the year-on-year revenue development improving during in the second half of 2024 compared to the development in the first half. The decline in net sales was driven by the weak demand for consumer credit information services mainly in Sweden but also in Finland. However, we continued to see good growth in the Business Insight business area and the share of net sales from new services improved and reached 15,6% (12,2%).
Our fiscal year Adjusted EBITDA was EUR 52,0 million (EUR 57,1 million), decreasing by 9,0% at comparable exchange rates and resulting in an Adjusted EBITDA margin of 34,6% (36,6%). Our free cash flow continued to be strong at EUR 30,7 million (EUR 32,0 million) and cash conversion improved to 66,2% (62,6%). The Efficiency Program helped to partially offset the negative impact on profitability from declining consumer credit information sales and increased data acquisition costs.
In the fourth quarter of 2024, adjusted EBITDA decreased to EUR 11,7 million (EUR 13,4 million), resulting in margin of 30,9% (34,4%). As stated in the third quarter interim report, our margin continued to be pressured by a weaker sales mix, price increases impacting data costs, as well as product renewals and commercialization activities. Moreover, the ongoing IT infrastructure consolidation impacted the level of production for own use and development speed and capacity.
Business Insight net sales continued to grow in the fiscal year and fourth quarter of 2024, driven by good performance in Finland, Norway and Denmark. During 2024, we successfully transitioned to enhanced subscription service packages for SME customers in Finland. In Sweden, we continued premium product platform modernization to better serve customers and to drive scale with one Nordic platform and we also moved into a new Allabolag.se site. Furthermore, we continued to launch new services, such as first compliance services in Sweden and Norway, and ESG-integrated property climate risk service in Sweden.
Consumer Insight net sales declined due to weak demand for consumer credit information in Sweden and Finland throughout the fiscal year and the fourth quarter of 2024. Many lenders have reduced their usage of the loan broker channel, which has put significant pressure on our volumes in Sweden. There were also signs of stabilization in the Swedish market during the second half as our consumer credit information volumes grew clearly outside the loan broker segment. Moreover, we have maintained strong customer relationships, and we did not lose any clients in the consumer credit information in Sweden or Finland due to competition during the year.
There were several important milestones and positive developments in the Consumer Insight during 2024. In Finland, we implemented the governmental positive credit register for our customers and continue to be an important integrator with several value-added services. In Sweden, the new regulatory developments aimed at preventing over-indebtedness were approved by the government in November 2024. While we expect these measures to slow the recovery of the Swedish consumer credit market in 2025, the new situation also provides us with opportunities to make investments in our technology and service quality. We also continued to grow in new verticals such as e-commerce and telecom and launched new services in PSD2 and fraud prevention. These services have generated strong customer interest, and we signed our first major anti-fraud score deal in Sweden in the fourth quarter.
Looking ahead to 2025, there are signs of gradual macroeconomic improvement and stabilization in consumer credit demand. Demand for business information services remains good, but especially our Swedish consumer credit information business faces uncertainty due to the new regulations and structural changes. The proposed new regulations, if implemented, would introduce stricter banking license requirements and would be likely to further impact the activity in the Swedish market. Despite the short-term uncertainty, there are however many growth drivers, and we continue to execute our strategy to drive profitable growth. In 2025, we expect our net sales to be in the range of EUR 150-156 million and Adjusted EBITDA to be in the range of EUR 50-55 million. We remain focused on maintaining profitability and strengthening free cash flow through disciplined cost control, while simultaneously investing in future competitiveness and growth opportunities.
At Enento, attractive capital allocation through strong cash flows and dividends is a priority. For the 2024 fiscal year, the dividend proposal is EUR 0,50 per share, followed by an authorization for a second instalment up to EUR 0,50 per share in November, subject to the Board of Directors’ separate decision.
I would like to thank all our customers, employees, partners, and shareholders for their support throughout 2024. I am confident that our strong team and focused strategy execution will support our leading position in the Nordics and ambition to deliver profitable growth as market conditions improve.
WEBCAST
Webcast for analysts, investors and media will be arranged on Friday, 14 February 2025, 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://enento.events.inderes.com/q4-2024/register
The presentation material and the webcast recording will be available on Enento’s investor website.
Helsinki, 14 February 2025
ENENTO GROUP PLC
Board of Directors