ENENTO GROUP PLC, STOCK EXCHANGE RELEASE 6 NOVEMBER 2020 AT 11:00 A.M. EET
Enento Group’s Interim Report 1.1. – 30.9.2020: Strong service development and good profitability in a challenging business environment
SUMMARY
July – September 2020 in brief
- Net sales amounted to EUR 36,7 million (EUR 36,7 million), an increase of 0,1 % (at comparable exchange rates a decrease of 1,0 %).
- Adjusted EBITDA excluding items affecting comparability was EUR 14,8 million (EUR 14,0 million), an increase of 5,7 % (at comparable exchange rates an increase of 4,4 %).
- Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to acquisitions was EUR 12,4 million (EUR 12,0 million), an increase of 2,8 %.
- Operating profit (EBIT) was EUR 9,2 million (EUR 8,3 million). Operating profit included items affecting comparability of EUR 3,2 million (EUR 3,7 million), mainly arising from amortisation from fair value adjustments of EUR 3,1 million (EUR 3,0 million) related to acquisitions as well as M&A and integration expenses.
- New products and services represented 6,3 % (3,4 %) of net sales.
- Free cash flow amounted to EUR 11,0 million (EUR 12,5 million). The effect of items affecting comparability on free cash flow was EUR -0,6 million (EUR -0,9 million).
- Earnings per share were EUR 0,28 (EUR 0,25).
- Comparable earnings per share were EUR 0,38 (EUR 0,53)1.
- On 6 November 2020, the Board of Directors decided on a capital repayment in accordance with the Board’s authorisation, amounting to EUR 0,34 per share and with the payment date being 26 November 2020.
January – September 2020 in brief
- Net sales amounted to EUR 111,1 million (EUR 106,8 million), an increase of 4,1 % (at comparable exchange rates an increase of 4,1 %).
- Adjusted EBITDA excluding items affecting comparability was EUR 39,7 million (EUR 37,9 million), an increase of 4,5 % (at comparable exchange rates an increase of 4,5 %).
- Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to acquisitions was EUR 33,0 million (EUR 31,0 million), an increase of 6,4 %.
- Operating profit (EBIT) was EUR 21,7 million (EUR 20,0 million). Operating profit included items affecting comparability of EUR 11,3 million (EUR 11,0 million), mainly arising from amortisation from fair value adjustments of EUR 9,1 million (EUR 8,5 million) related to acquisitions as well as M&A and integration expenses.
- New products and services represented 5,2 % (3,9 %) of net sales.
- Free cash flow amounted to EUR 23,5 million (EUR 25,2 million). The effect of items affecting comparability on free cash flow was EUR -2,0 million (EUR -2,0 million).
- Earnings per share were EUR 0,66 (EUR 0,60).
- Comparable earnings per share were EUR 0,96 (EUR 0,88)1.
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 | 1.7. – 30.9.2020 |
1.7. – 30.9.2019 |
1.1. – 30.9.2020 | 1.1. – 30.9.2019 | 1.1. – 31.12.2019 |
| Net sales | 36,7 | 36,7 | 111,1 | 106,8 | 146,0 |
| Net sales growth, % | 0,1 | 16,8 | 4,1 | 71,6 | 48,7 |
| Operating profit (EBIT) | 9,2 | 8,3 | 21,7 | 20,0 | 27,8 |
| EBIT margin, % | 25,1 | 22,7 | 19,6 | 18,8 | 19,0 |
| Adjusted EBITDA | 14,8 | 14,0 | 39,7 | 37,9 | 51,5 |
| Adjusted EBITDA margin, % | 40,3 | 38,1 | 35,7 | 35,5 | 35,3 |
| Adjusted operating profit (EBIT) | 12,4 | 12,0 | 33,0 | 31,0 | 42,6 |
| Adjusted EBIT margin, % | 33,7 | 32,8 | 29,7 | 29,1 | 29,2 |
| New products and services of net sales, % | 6,3 | 3,4 | 5,2 | 3,9 | 4,0 |
| Free cash flow | 11,0 | 12,5 | 23,5 | 25,2 | 32,1 |
| Net debt to adjusted EBITDA, x | 2,4 |
2,7 |
2,7 | 3,0 | 2,9 |
FUTURE OUTLOOK
Net sales: Enento Group expects net sales to grow in full year 2020, the growth rate however remaining below the long-term target range of 5–10 %.
EBITDA: Enento Group expects its adjusted EBITDA margin in full year 2020 to remain at the previous year’s level.
Capital expenditure: Enento Group expects its capitalised product development and software expenses in 2020 to be at the previous year’s level.
The outlook is based on the assumption that exchange rates remain at the current level.
JUKKA RUUSKA, CEO
Our business environment remains challenging in spite of the signals indicating a market recovery. The third quarter of the financial year 2020 was a quarter of low growth for Enento Group. Consolidated net sales amounted to EUR 36,7 million, representing a year-on-year increase of 0,1 % (at comparable exchange rates -1,0 %). Adjusted EBITDA increased by 5,7 % (at comparable exchange rates 4,4 %) and amounted to EUR 14,8 million. The Group’s adjusted operating profit excluding items affecting comparability grew by 2,8 % (at comparable exchange rates 1,4 %) and amounted to EUR 12,4 million. The Group’s net sales were supported in both markets by newly launched services. Their share of net sales continues to grow, amounting to 6,3 % of in the third quarter.
The development of net sales was accelerated particularly by the strong growth of the Digital Processes business area’s real estate information services in both markets. In the SME & Consumers business area, growth was achieved in services sold directly to consumers, especially in the Swedish market. The net sales of the Customer Data Management business area increased moderately in both markets. The net sales of the Risk Decisions business area continued to decrease in both markets as the decline in economic activity reduced the use of our services. The temporary 10 per cent interest rate ceiling on consumer credit introduced due to the coronavirus crisis continues to have a negative impact on the demand for our services in the Finnish market.
We are making progress in line with our targets with regard to the launch of new services during the financial year, and we are on track for growth. For the comparison period last year the share of net sales represented by new services was 3,4%, for the full last fiscal year it was 4,4 %, and now it is 6,3 %. Our range of beneficial owner services grew in the Swedish market thanks to the launch of a monitoring service by which we help our clients update their customer information with beneficial owner information. In the Finnish market, we launched the Customer Pro target group tool. The tool offers more than 2,1 million items of up-to-date consumer contact details to help reach potential customers via digital marketing channels or telemarketing. The Corporate Responsibility Report service, which is the first tool on the market to shed light on the background of unlisted companies, is now also available in the business information online store in Finland.
For more than two years now, Enento has implemented the Nordic CX programme, which is aimed at maintaining and improving the customer experience and customer loyalty. We also measure our Net Promoter Score (NPS) on a daily basis to monitor our customers’ perceptions of customer encounters with our sales and customer service functions. In the second and third quarters, we were unable to meet with our customers in the usual manner due to the coronavirus situation. In spite of that, our NPS score for customer encounters was very high at 70.
Understanding the customer experience is the key to success in service development. It is also a strategic priority for us. In addition to regular customer panels, we actively interview our customers to assess their needs, validate service development initiatives and pilot new services with small customer groups. Naturally, we also use our own services to gain deeper customer insight, starting from the basic information and financial data of companies and user profile specifications using the Business Filter Pro tool. We also help our customers find the right services to suit their needs using various service packages, for example. For us, the customer always comes first.
NEWS CONFERENCE: WEBCAST AND CONFERENCE CALL
Enento Group will hold a webcast for analysts, investors and media in English on Friday, 6 November 2020 at 2.00 p.m. EET where CEO Jukka Ruuska and CFO Elina Stråhlman will present the performance and events of the third quarter 2020.
You can follow the English webcast and conference call at:
https://cloud.webcast.fi/enento/enento_2020_1106_q3/
To participate in the conference call, please dial in using one of the numbers below
Finland: +358 (0)9 7479 0360
Sweden: +46 (0)8 5033 6573
United Kingdom: +44 (0)330 336 9104
United States, LA: +1 323-794-2095
The conference ID code: 436813
The presentation material will be available on the company’s investor website at 12.30 a.m. EET and a recording of the webcast later during the day.
Helsinki, 6 November 2020
ENENTO GROUP PLC
Board of Directors
For further information:
Jukka Ruuska
CEO
Enento Group Plc
Tel. +358 10 270 7111
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 420 people are working for Enento Group in Finland, Norway, Sweden and Denmark. The Group’s net sales for 2019 was 146 MEUR. Enento Group is listed on Nasdaq Helsinki with the trading code ENENTO.