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Gofore Plc ('Gofore' or 'Company') announces today that it is planning an initial public offering ('IPO') and a listing of its shares on the First North Finland market operated by Nasdaq Helsinki Ltd ('Listing').
Gofore, operating since 2002, is a digital services company that has grown strongly and is seeking further growth. The Company offers modern services that help operators in the private and public sectors to face digital change. The Company's services cover the entire value chain - from management consulting to service design and implementation as well as cloud services. Gofore's mission is to change the world for the better through digitalisation and by renewing ways of working.
Gofore currently employs over 350 people in Helsinki, Jyväskylä, Tampere, Swansea and Munich. Gofore was chosen as the best workplace in Finland and the second-best workplace in Europe in the Great Place to Work 2017 survey.
The objective of the contemplated IPO) is to promote Gofore's growth and the expansion of its operations in accordance with the Company's strategy. The Listing is also aimed at enabling the use of shares as means of payment in potential corporate acquisitions and for rewarding Company employees and key personnel. The contemplated Listing is also expected to improve awareness of the Company among customers and its attractiveness as an employer. The contemplated IPO is expected to consist of both a primary offering, where the Company issues new shares, and a secondary offering, where certain shareholders of the Company sell their existing shares. In the IPO, the objective would be to raise approximately EUR 10 million of new equity before IPO related fees and expenses. The equity raised may be used in corporate transactions, for promoting organic growth of the Company and for general corporate purposes.
Two domestic institutional investors, Ilmarinen Mutual Pension Insurance Company ('Ilmarinen') and Varma Mutual Pension Insurance Company ('Varma'), have committed to becoming Cornerstone Investors ("Cornerstone Investors") in the contemplated IPO and have given their subscription commitments in regard to the IPO.
Cornerstone Investors
The Cornerstone Investors have committed to subscribing for shares at the subscription price of the institutional offering in the possible IPO, subject to certain conditions being fulfilled, including that the maximum valuation of all of the Company's outstanding shares (before any proceeds from the share issue), based on the subscription price of the institutional offering, does not exceed EUR 78.4 million. The respective commitments of the Cornerstone Investors are proportional shares of the outstanding shares in the Company following completion of the possible IPO as follows: (i) Ilmarinen: up to 8 % shareholding after the IPO, and (ii) Varma: up to 4.9 % shareholding after the IPO. The Company is committed to allocating to Ilmarinen a minimum of 6.5 % and Varma a minimum of 4.0 % of the total number of shares in the Company following the IPO.
Gofore's CEO Timur Kärki:
"Expert services related to digitalisation, which Gofore also provides, are in great demand in the modern world. We have succeeded in renewing ourselves year after year in a way that has allowed our range of services to meet the needs of both the public and private sector.
Gofore is actively involved in this change in a wide range of sectors, from comprehensive Government digitalisation projects to the development of new services for the financial sector. At the same time, we have created a workplace for over 350 professionals, and are aiming to increase our number of employees even further. This year Gofore was chosen as the best place to work in Finland and the second-best in Europe.
All this has resulted in financial success as well. We have been growing profitably every year for over ten years now. It has been a staggering ride, and I believe that we can keep up this pace in the future as well. In the previous financial period, we increased our net sales by 49.9 %. It currently seems like our reported net sales will grow by over 75 % in this financial period and still rather profitably. All in all, we have rapidly advanced to our sector's bigger leagues.
We are considering listing on the First North market because we believe this would strengthen our growth and allow us to serve our clients even better."
Gofore's strengths create competitive advantage
We consider our main strengths to be:
- Strong expertise and competence
- A unique corporate culture, that allows us to set ambitious targets
- A flat organisation and an innovative management model
- The goal of minimisation of risks through business predictability
- Continuous development
- Wide range of operating sectors and technologies
Financial targets and dividend policy
Financial targets
Gofore is pursuing net sales growth exceeding the growth of the target market, estimated to be 15-25 % annually in the next few years, and operating profit before amortisation of goodwill (EBITA) margin of 15 %.
In evaluating financial targets, the Board of Directors of the Company has based its evaluation on the business conditions of Gofore Group formed after the Leadin acquisition. Thus, the comparability of financial targets versus full-year reported and actualized financial results for the financial year 2017 is materially affected by the mid-financial-year corporate acquisition (May 2017). The financial information of Leadin and Gofore have only been consolidated as of 1 June 2017 and therefore, the full-year reported financial information of the Gofore group will not contain Leadin financial information between January-May 2017.
Dividend policy
Gofore aims to distribute at least 40 % of its net profit as dividends annually. However, the distribution and amount of dividends is affected by at least the following factors: the Company's financial results and standing, future growth investments, cash flow from operations, the amount of net debt, the need for debt servicing and other factors considered relevant by the Board of Directors.
Forecast for 2017
The Company's management estimates that in the financial year 2017 the Company's net sales will grow to EUR 32.5-34.5 million (reported), and that the Company's operating profit before amortisation of goodwill (EBITA) will be EUR 5.2-6.2 million (reported).
Gofore's key figures
In spring 2017, Gofore acquired the Leadin Group. The merger serves to further strengthen Gofore's international business operations and service design expertise. Leadin has been incorporated into Gofore's reported financial figures as of 1 June 2017.
During the nine-month period ending on 30 September 2017, the Gofore Group's net sales increased by 76.0 % to a total of EUR 22.7 million. Pro forma net sales that take into account the acquisition of Leadin, increased to a total of EUR 26.1 million during the nine-month period ending on 30 September 2017. Operating profit before amortisation of goodwill (EBITA) during the nine-month period ending on 30 September 2017 was EUR 4.0 million, corresponding to 17.7 % of net sales. Pro forma operating profit before amortisation of goodwill (EBITA) was EUR 4.8 million, or 18.4 % of pro forma net sales. During the financial period, 63 % of the Group's pro forma net sales came from public sector customers and 37 % from private sector customers. During the first nine months of 2017, 87 % of the Group's pro forma net sales came from Finland and 13 % came from the Group's operations abroad.
Key figures table
| Euro, millions, unless otherwise stated | 1.1.-30.9.2017 1) | 1.1.-30.9.2016 | 1.1.-31.12.2016 | 1.1.-31.12.2015 |
| (Unaudited) | (Unaudited, unless otherwise stated) | |||
| Net sales | 22,7 | 12,9 | 18,6 2) | 12,4 2) |
| Net sales growth, % | 76,0 | - | 49,9 | - |
| Pro forma net sales | 26,1 | - | 22,8 | - |
| EBITDA 3) | 4,1 | 1,9 | 2,7 | 1,6 |
| EBITDA margin, % 3) | 18,1 | 14,9 | 14,6 | 12,9 |
| Pro forma EBITDA 3) | 4,9 | - | 3,3 | - |
| Pro forma EBITDA margin, % 3) | 18,8 | - | 14,3 | - |
| Operating profit before amortization of goodwill (EBITA) 3) | 4,0 | 1,9 | 2,6 | 1,6 |
| Operating profit before amortization of goodwill (EBITA) margin, % 3) | 17,7 | 14,4 | 14,1 | 12,5 |
| Pro forma operating profit before amortization of goodwill (EBITA) 3) | 4,8 | - | 3,2 | - |
| Pro forma operating profit before amortization of goodwill (EBITA) margin, % 3) | 18,4 | - | 13,8 | - |
| Operating profit (EBIT) | 3,8 | 1,9 | 2,6 2) | 1,6 2) |
| Operating profit (EBIT) margin | 16,9 | 14,4 | 14,1 | 12,5 2) |
| Pro forma operating profit (EBIT) | 4,4 | - | 2,6 | - |
| Pro forma operating profit (EBIT) margin | 16,7 | - | 11,3 | - |
| Profit for the period | 2,9 | 1,5 | 2,1 2) | 1,2 2) |
| Adjusted profit for the period 3) | 3,3 | 1,5 | 2,1 | 1,2 |
| Earnings per share (EPS), undiluted, euro 3) | 0,27 | 0,14 | 0,20 | 0,12 |
| Adjusted earnings per share (adjusted EPS), undiluted, euro 3) | 0,30 | 0,14 | 0,20 | 0,12 |
| Pro forma profit for the period | 3,3 | - | 1,9 | - |
| Adjusted pro forma profit for the period 3) | 3,9 | - | 2,5 | - |
| Adjusted pro forma earnings per share (adjusted EPS), undiluted, euro 3) | 0,35 | - | 0,24 | - |
| Number of shares outstanding at the end of the period (adjusted for share split) | 11 338 800 | 10 560 000 | 10 560 000 | 10 560 000 |
| Equity ratio, % 3) | 39,6 | - | 54,1 | 49,8 2) |
| Net gearing, % 3) | 20,7 | - | -97,9 | -90,6 |
| Return on equity (ROE), % 3), 4) | 67,3 | - | 63,3 | 57,3 2) |
| Return on investment (ROI), % 3), 4) | 54,3 | - | 77,1 | 65,8 |
| Number of employees at the end of the period | 354 | 185 | 196 | 132 |
1) Figures presented for nine months ending on 30.9.2017 are consolidated figures. Leadin group is consolidated from 1.6.2017 onwards in the figures presented for nine months ending on 30.9.2017.
2) Audited.
3) Alternative performance measure. The Company presents alternative performance measures as additional information to financial measures presented in the consolidated statement of income, consolidated statement of financial position and consolidated statement of cash flows prepared in accordance with FAS. In the Company's view, the alternative performance measures provide management, investors, securities analysts and other parties with significant additional information related to the Company's results of operations, financial position and cash flows.
4) Annualized.
Information on the IPO
The contemplated IPO is expected to consist of both a primary offering where the Company issues new shares, with which the Company would aim to raise approximately EUR 10 million of new equity before IPO related fees and expenses, and a secondary offering where certain shareholders of the Company would sell their existing shares. The Company and its shareholders would commit to customary lock-up arrangements in connection with the IPO. The contemplated IPO is expected to include a personnel offering to the management and employees of Gofore.
The Company will decide on the contemplated Listing and IPO, and timing thereof at a later date.
Evli Bank Plc would act as the Lead Manager in the contemplated IPO. The Company's legal adviser is Borenius Attorneys Ltd.
Press event
Gofore will hold a press event today, 26 October 2017, at 10:00 in the premises of the Helsinki Stock Exchange in the address Fabianinkatu 14, 00100 Helsinki.
For more information, please contact
Timur Kärki, CEO, Gofore
timur.karki@gofore.com
tel. +358 (0)40 828 5886
Petteri Venola, CFO, Gofore
petteri.venola@gofore.com
tel. +358 (0)400 805 487
Riikka Nurminen, Marketing & Communication Director, Gofore
riikka.nurminen@gofore.com
tel. +358 (0)50 486 8600
Gofore Plc is a digital services company operating since 2002. We offer modern services that help operators in the private and public sectors to face digital change. Our mission is to change the world for the better through digitalisation and by renewing ways of working. Our services cover the entire value chain - from management consultation to service design and implementation as well as cloud services. Staying on top and ahead of the development requires us to be fast-paced, regenerative and competitive. We have 15 years of expertise in this. Our operations are characterised by top expertise, alacrity and genuine interaction. We believe that we are the best partner to our clients on the path to digital change. Gofore currently employs over 350 people in Helsinki, Jyväskylä, Tampere, Swansea and Munich. Gofore was chosen as the best workplace in Finland and the second-best workplace in Europe in the Great Place to Work® survey in 2017. More information: www.gofore.com.
DISCLAIMER
The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Canada, New Zealand, Australia, Japan, Hong Kong, Singapore or South Africa. These written materials do not constitute an offer of securities for sale in the United States, nor may the securities be offered or sold in the United States absent registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. Gofore Plc (the "Company") does not intend to register any portion of the offering in the United States or to conduct a public offering of securities in the United States.
The issue, exercise and/or sale of securities in the initial public offering are subject to specific legal or regulatory restrictions in certain jurisdictions. The Company or Evli Bank Plc assume no responsibility in the event there is a violation by any person of such restrictions.
The information contained herein shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. Investors must neither accept any offer for, nor acquire, any securities to which this document refers, unless they do so on the basis of the information contained in the applicable prospectus published or offering circular distributed by the Company.
The Company has not authorized any offer to the public of securities in any Member State of the European Economic Area other than Finland. With respect to each Member State of the European Economic Area other than Finland and which has implemented the Prospectus Directive (each, a "Relevant Member State"), no action has been undertaken or will be undertaken to make an offer to the public of securities requiring publication of a prospectus in any Relevant Member State. As a result, the securities may only be offered in Relevant Member States (a) to any legal entity which is a qualified investor as defined in the Prospectus Directive; or (b) in any other circumstances falling within Article 3(2) of the Prospectus Directive. For the purposes of this paragraph, the expression an "offer of securities to the public" means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to exercise, purchase or subscribe the securities, as the same may be varied by any measure implementing the Prospectus Directive in that Relevant Member State and the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.
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