Innofactor Plc's Interim Report for January 1–March 31, 2013 (IFRS)

Innofactor Plc Interim Report April 30, 2013, at 8:30 Finnish time

Innofactor Plc's Interim Report for January 1–March 31, 2013 (IFRS)         

Summary

Innofactor's net sales in 2013 are expected to be about EUR 24 million (2012: EUR 18,818 thousand). Operating profit before depreciation and amortization (EBITDA) in 2013 is expected to be about EUR 2 million (2012: EUR 1,215 thousand).

The figures in this Interim Report have not been audited.

Reporting

Innofactor operates on a single segment, offering software, systems and related services.

CEO Sami Ensio's review

On the first quarter of 2013, Innofactor continued profitable growth in accordance with its strategy. The growth of net sales was at 39.5 percent and EBITDA was 10.5 percent. Measured in net sales (EUR 5.5 million) and EBITDA (EUR 0.6 million), this was the best first quarter in Innofactor's history.

Innofactor expects 2013 to be a year of profitable growth. Our personnel is committed and motivated to work even harder for our customers, which can also be seen in the well-developing personnel satisfaction.

Innofactor's cash funds grew significantly during the review period. In the review period, the company's cash funds grew by EUR 1.9 million which is about EUR 1 million more than the comparable review period last year. Positive cash flow development is important for Innofactor's strategy, because it gives the company a stronger position as an active player in the field when it comes to acquisitions.  

Innofactor continues to actively seek potential strategic partnerships in Finland, Denmark and other Nordic Countries. The group will seek growth, which can be organic or based on mergers or acquisitions.

Market outlook and business environment

Due to the long-standing uncertainties in economic situation, it is challenging to make a reliable estimate on the development of the IT market in the near future. According to research companies monitoring the IT market, the IT service markets grew globally about 1–2 percent in 2012 and they are expected to grow about 3–5 percent in 2013. The growth of software market in 2012–2013 is estimated to be about one percentage point faster, that is, 4–6 percent in 2013.

The IT market is experiencing a clear turning point. One of the major trends is the consumerization of information technology: an increasingly larger share of the IT purchases made by companies is based on the requirements of individuals, that is, the consumer market. Commercial clients tend to purchase software that can be used on phones, tablets and computers. Another trend is the ability of public clouds to offer software in a scalable and global form to a wide range of end users and for all devices, including mobile phones.

Innofactor has made a strategic choice by focusing on solutions that use Microsoft technology. Innofactor believes that Microsoft is a strong player in the IT market change: it holds the leading position in the business software market, a significant position in the consumer software market, and invests heavily in mobile devices and cloud technologies.

Innofactor has selected as its application areas those areas where Microsoft's growth and, correspondingly, its partners' growth has exceeded manifold the growth of general global IT service and software markets. For example, in 2012, Microsoft repeatedly reported annual growth figures of over 30 percent in the sales of Dynamics CRM solutions and Microsoft SQL Server Premium servers (used in Microsoft-based BI solutions), and annual growth figures of over 10 percent in the sales of SharePoint, Lync and Exchange solutions. The above-mentioned Microsoft solution areas, which are growing significantly faster than other IT markets, form a significant part of Innofactor's business operations.

Additionally, the publishing of the Windows 8 operating system in October 2012 is significant for the Microsoft ecosystem and it is believed to strengthen Microsoft's competitiveness.

The company feels that for companies like Innofactor, which is strongly committed to Microsoft, this development creates growing global markets in the long term both as a traditional system integrator locally in the Nordic Countries and as a provider of cloud and mobile solutions globally.

Companies strongly committed to Microsoft in the Nordic Countries are mainly small companies. Innofactor believes that size give a competitive edge for a company also in the Microsoft ecosystem, making mergers of small companies focused on Microsoft solutions probable. This gives Innofactor opportunities to grow.

Espoo, April 30, 2013

INNOFACTOR PLC

Board of Directors

Additional information:

CEO Sami Ensio, Innofactor Plc
Tel. +358 50 584 2029
sami.ensio@innofactor.com

Briefings concerning the Interim Report January 1–March 31, 2013

On April 30, 2013, at 9:00 Finnish time, Innofactor will hold a briefing concerning the Interim Report in Finnish for the media, investors and analysts at the company's premises at Keilaranta 19, Espoo. The result will be presented by CEO Sami Ensio and CFO Mikko Karvinen. The presentations of the briefing will be available on Innofactor's web site after the briefing.

We ask you to register for the briefing beforehand either by sending email to ir@innofactor.com or by phoning to +358 50 554 3832.

Innofactor will also hold a conference call in English for analysts, media and investors on April 30, 2013, at 16:00 Finnish time. Registrations to ir@innofactor.com at least one hour before the event.

Financial releases in 2013

The schedule for financial releases in 2013 is as follows:

July 16–July 29, 2013: Silent period

July 30, 2013, at 8:30 Finnish time: Interim Report for January–June

October 15–October 28, 2013: Silent period

October 29, 2013, at 8:30 Finnish time: Interim Report for January–September

Distribution:
NASDAQ OMX Helsinki
Main media
www.innofactor.com