Enfo Oyj’s financial statements bulletin 1 January – 31 December 2012 | IT lösningar - vi erbjuder förstklassig IT lösning | Enfo Sweden
26 Feb

Enfo Oyj’s financial statements bulletin 1 January – 31 December 2012

Highlights in the financial statements bulletin

  • Turnover in October–December decreased by 4.9% and stood at EUR 39.1 million (41.1). Turnover in January–December increased by 1.3% to EUR 145.2 million (143.2).
  • Operating profit (EBIT) in October–December amounted to EUR 0.4 million (3.1). Operating profit in January–December stood at EUR 7.9 million (7.3). The October–December operating profit was lowered by non-recurring costs of EUR 1.7 million from customer projects of Consulting Services, and non-recurring business reorganisation costs of EUR 1.2 million in Sweden.
  • Profit before taxes in October–December amounted to EUR 0.0 million (2.3). Profit before taxes in January–December stood at EUR 6.7 million (6.3)
  • Earnings per share in October–December were EUR -1.23 (2.30). In January–December, earnings per share were EUR 5.16 (7.19).
  • The twelve-month return on investment was 10.6% (9.7%).
  • In January–December, Enfo Group employed an average of 778 people (727). At the end of December, the Group employed a total of 792 people (771).
  • Business cash flow in January–December stood at EUR 6.3 million (6.8).
  • The company estimates the Group’s turnover and operating profit to be at the previous year’s level in the first quarter of 2013.

 

Market

Macroeconomic uncertainty continues to affect the decision-making behaviour of customer companies within the company’s main market area in Finland and Sweden. Caution in launching new projects decreases demand for the company’s consulting services. In 2012, the company estimates that IT service market growth was 1–2% in Finland and Sweden. This year, the market growth may be slightly higher than the year before.

Group structure

Enfo Oyj is the parent company of Enfo Group. Enfo’s business operations are divided into two separately reported segments – IT Services, and Information Logistics Services.

Business development

Enfo’s Outsourcing Services developed positively in Finland and Sweden in 2012 despite the uncertainty associated with the general economic situation. Due to the uncertainty over economic development, companies were eager to enter their services in competitive bidding. Enfo increased its market share in Finland by gaining several new extensive IT agreements. In addition, Enfo’s current customers extended and expanded their service agreements. The range of Finnish Consulting Services supplemented Outsourcing Services, with infrastructure projects being productive because, last year, the majority of Enfo’s customers switched to the Windows 7 operating system as part of their service expansions. In Consulting Services, demand for identity management projects was at the previous year’s level in Finland.

One of the most significant IT agreements signed in 2012 was the service agreement signed with VR Group, according to which VR Group selected Enfo as its IT partner for basic IT services. The agreement covers the availability and capacity services of the Group’s servers, as well as service desk and workstation services in an IT environment of nearly 9,000 users. The total value of the four-year agreement is more than EUR 20 million. New agreements were also signed with PwC (PricewaterhouseCoopers), a company specialised in business management consulting, auditing and business arrangements, and Arek Oy, an IT system developer in the employment pension industry.

Last year was a time of strong development of Enfo’s Nordic Outsourcing Services. In order to strengthen the progress of its IT services and to produce services of even higher quality for its customers, Enfo introduced the IT service management system MyEnfo, with which the efficiency of daily processes and services can be improved even further. In addition, Enfo invested in the revised management of workstations, mobile devices and servers. In Outsourcing Services, the objective is to strengthen uniform processes in customer account management, service range and service production between Finland and Sweden.

In Industry Verticals, a number of cooperation projects related to traffic development with VR and the Helsinki Regional Transport Authority (HSL) proceeded as planned last year. Demand for Unified Communications is expected to grow further this year. For example, the energy industry has made massive investments in the development of communications solutions. In Unified Communications, new agreements were signed in 2012 with the games and entertainment company Rovio, and Citycon Oyj.

In Sweden, the uncertain global economy was reflected in the development of Consulting Services. Customers were more cautious, closely following the general economic situation. There was demand for consulting services that reduce costs rapidly and improve the efficiency of business operations, such as integration projects and SAP services. The market was characterised by fierce price competition, and customers entered their projects in competitive bidding, which had an impact on the profitability trend of Consulting Services. As a result of the fierce price competition, the profitability of fixed-price customer projects fell clearly from the previous year. In 2012, Enfo signed consulting agreements with the European Spallation Source (ESS) research centre, the oil company Preem AB, the financial company VolvoFinans, and the packaging company DS Smith. In addition, Microsoft selected Enfo Zipper, a company specialised in IT infrastructure consulting, as its 2012 VIP Desktop Partner.

In Information Logistics Services, 2012 was a year of heavy development. Enfo expanded its invoicing service range to invoice material validations and payment supervision services and, according to its new information logistics strategy, Enfo steered its service development towards intelligent data processing. Demand for electronic services continued to be strong, with new intelligent data processing services raising interest among customers. The market has been expecting new service concepts for analysing the increasing volume of data and reporting it for business purposes. In order to strengthen the independent development of Information Logistics Services, Enfo Oyj announced in September 2012 it would corporatize the operations of Information Logistics Services under Enfo Zender Oy. The company was entered in the Trade Register on 5 September 2012 and started its independent operations on 1 October 2012.

New agreements were signed with the Hospital District of Helsinki and Uusimaa (HUS). HUS selected Enfo as its information logistics operator regarding the transfer of sales invoices and customer letters. The agreement covers nearly 1.3 million invoices, 800,000 pages of invoice attachments and 100,000 customer letters that comprise only part of all customer letters sent by HUS every year. The total value of the agreement is more than EUR 1.9 million over three years. In addition, the joint municipal authority Puhti operating in Western Uusimaa signed an agreement with Enfo on its e-invoice and printing services.

 Enfo will deliver remotely read electric meters to Rauman Energia and Vakka-Suomen Voima to a total of 43,000 locations. The pilot installation started in 2012. The value of the ten-year agreement is nearly EUR 10 million.

Turnover

Enfo Group’s turnover in October–December decreased by 4.9% to EUR 39.1 million (41.1). In January–December, turnover grew by 1.3% to EUR 145.2 million (143.2). The consolidated turnover was decreased by the strategic reduction in hardware sales in Finland. The turnover was increased by stronger demand for Outsourcing Services.

Development of turnover by reporting segment

EUR million

10-12/2012

10-12/2011

1-12/2012

1-12/2011

IT Services

29.5

32.9

111.8

109.9

Information Logistics Services

10.0

8.7

35.4

35.2

The turnover of IT Services in October–December decreased by 10.4% to EUR 29.5 million (32.9). In January–December, turnover increased by 1.7% to EUR 111.8 million (109.9). The decrease in turnover is partly caused by the large non-recurring software sale completed in the corresponding period in the reference year. The full-year turnover was increased by strong demand for Outsourcing Services.

The turnover of Information Logistics Services grew in October-December by 15.4% to EUR 10.0 million (8.7), and the full-year turnover increased by 0.7% to EUR 35.4 million (35.2). The increase in turnover was caused by stronger demand for automatic meter reading services (AMM) and intelligent data processing services.

Profitability

 

Enfo Group’s operating profit decreased by 85.9% in October-December and stood at EUR 0.4 million, representing 1.1% of turnover (EUR 3.1 million and 7.6%). The Group’s operating profit in January–December was EUR 7.9 million (7.3), comprising 5.5% of turnover (5.1%). The Group’s October-December operating profit contains non-recurring costs of EUR 1.7 million from customer projects of Consulting Services, and business reorganisation costs of EUR 1.2 million in Sweden. The increase in the Group’s profitability was affected by the efficiency measures performed last year in Outsourcing Services.

 

The Group’s profit before taxes in October-December stood at EUR -0.0 million (2.3), comprising -0.1% of turnover (5.7%). Profit before taxes in January-December stood at EUR 6.7 million, comprising 4.6% of turnover (EUR 6.3 million and 4.4%). The Group’s net financing costs stood at EUR 0.5 million (0.8) in October–December, and EUR 1.2 million (1.0) in January-December. The result in October-December was EUR -0.6 million or -1.6% of turnover (1.8 and 4.3%). The result in January-December was EUR 4.4 million (4.7), comprising 3.0% of turnover (3.3%). Earnings per share in October-December were EUR -1.23 (2.03). In January-December, earnings per share were EUR 5.16 (7.19).

Development of operating profit by reporting segment

EUR million

10-12/2012

10-12/2011

1-12/2012

1-12/2011

IT Services

-0.9

1.6

3.2

2.3

Information Logistics Services

1.3

1.4

4.7

5.0

The decrease in the operating profit of IT Services during the final quarter shows the non-recurring costs from customer projects in Swedish Consulting Services and business reorganisation costs. The operating profit was increased by the efficiency measures in Outsourcing Services and the increase in turnover in Finland. In addition, Industry Verticals improved its profitability.

The decrease in the operating profit of Information Logistics Services shows the tighter information logistics market and increased price competition.

Financing and investments

Enfo’s net investments stood at EUR 1.2 million (3.1) in October-December, and EUR 3.8 million (11.3) in January-December. The investments were mainly allocated to data centre hardware acquired through financial leasing agreements and development costs arising from data systems.

The company’s equity ratio was 42.7% (41.1) at the end of the period. Interest-bearing net liabilities at the end of December amounted to EUR 31.1 million (29.7) and net gearing was 64.6% (64.4).

 

Personnel

In January-December, Enfo Group employed an average of 778 people (727). At the end of December, the Group employed a total of 792 people (771).

Enfo’s IT Services unit employed an average of 679 people in January-December (636), and the Information Logistics Services unit employed an average of 74 people (75). Of Enfo’s personnel, 332 (346) were employed in Finland and 446 (381) in Sweden during the review period.

Board of Directors and management

Enfo Oyj’s Chairman of the Board of Directors is Tapio Hakakari, Managing Director of Webstor Oy. The other members of the Board of Directors are Hannu Isotalo, Chairman of the Board of Directors of Lujatalo Oy; Ossi Saksman, Chairman of the Board of Directors of Osuuskunta KPY; Mammu Kaario, Investment Director at Korona Invest Oy; and Timo Kärkkäinen, Senior Portfolio Manager of Ilmarinen Mutual Pension Insurance Company.

Enfo Group’s management team members were CEO Arto Herranen, CFO Tero Kosunen (finance and communications), Senior Vice President Maria Lundell (HR), Executive Vice President Nina Annila (Industry Verticals), Executive Vice President Johan de Verdier (Consulting Services) until 31 October 2012, Executive Vice President Osmo Wilska (Outsourcing Services), Managing Director Tero Saksman (Enfo Zender), Executive Vice President Lars Aabol (Consulting Services), Managing Director Magnus Björk (Enfo Zipper) until 30 November 2012, Managing Director Fredrik Bergman (Enfo Zystems) from 1 December 2012, Managing Director Peter Lörincz (Enfo Zipper), Business Unit Director Johan Wilhelmsson (Outsourcing Sweden) and Marketing Director Adam Ritzén.

Shares

On 31 December 2012, Enfo Oyj had a total of 589,120 shares. At the end of the period, the company had a total of 106 shareholders. The company has one series of shares. Enfo owned 4,950 of its treasury shares at the end of December 2012.

At the end of 2012, the company’s ten largest owners were Osuuskunta KPY, Pohjola Insurance Ltd, Ilmarinen Mutual Pension Insurance Company, Suomi Mutual Life Assurance Company, Enfo Oyj’s Personnel Fund HR, Enfo Oyj, Einari Vidgrén Oy, Keskisuomalainen Oyj, Pohjois-Savo Cooperative Bank, and Hannu Isotalo Oy. Osuuskunta KPY’s share of ownership is 81.9%.

Events after the end of the financial period

On 14 February 2013, Enfo was selected as one of the best workplaces in Finland in the survey organised by Great Place to Work Institute Finland. Enfo placed 16th on the list.

Forecast for likely future development

The company estimates the Group’s turnover and operating profit to be at the previous year’s level in the first quarter of 2013.

Risks and uncertainties

Short-term risks and uncertainties are associated with the maintenance of competitive prices and the demand for consulting services in the highly competitive IT services market.

Distribution of profit

On 31 December 2012, the parent company’s distributable funds totalled EUR 26,725,178.17. The company’s Board of Directors will propose to the Annual General Meeting that a dividend of EUR 1.70 per share be paid for the 2012 financial period. The dividend will be paid to shareholders who are recorded in the company’s list of shareholders maintained by Euroclear Finland Oy by the record date of the dividend payment, 26 March 2013. The dividend will be paid on 31 May 2013.

The Board of Directors will also propose that the Annual General Meeting authorises the Board of Directors, in accordance with Chapter 6, Section 13, Paragraph 2 of the Companies Act, to decide on an additional dividend of a maximum of EUR 3.40 per share within the limitations of the company’s capital adequacy and operating result. The authorisation is proposed to be valid until the beginning of the next Annual General Meeting.

Timetable for financial reporting in 2013
The 2012 financial statements and annual report will be published on the Enfo Oyj website on 28 February 2013 at 12:00 noon. Enfo Oyj’s Annual General Meeting will be held on 21 March 2013.
The 2013 Q1 interim report will be published on 2 May 2013, the Q2 interim report on 29 August 2013 and the Q3 interim report on 24 October 2013.

 

Tables

Tables available in web: http://www.enfo.fi/en/about-us/investor-relations/financial-reports/

For additional information, please contact: Arto Herranen, CEO, tel. +358 44 7193 000 or Tero Kosunen, CFO, tel. +358 50 4441 200 (e-mail format: firstname.lastname@enfo.fi).

Enfo is a Nordic IT service company which offers IT outsourcing, business process outsourcing and IT consulting services for our customers in Finland, Sweden, Norway and Denmark so that our customers can focus on their key operations. Our strength is our nearly 50 years of experience in developing functional IT solutions and concepts, and the strong expertise of our nearly 800 top IT professionals. We produce simple, flexible and intelligent business processes. Enfo’s annual turnover is more than EUR 140 million. For further information about Enfo, please visit www.enfo.fi and www.enfo.se.

 

Distribution: main media and www.enfo.fi

Enfo Oyj

Business ID: 2081212-9

Visiting address: Viestikatu 7, FI-70600 Kuopio, Finland

Postal address: P.O. Box 1582, FI-70461 Kuopio, Finland

Billing address: P.O. Box 5005, FI-70701 Kuopio, Finland

Switchboard: +358 20 54321

Fax: +358 20 543 2355

E-mail: firstname.lastname@enfo.fi

 

 

Published: 26 Feb 2013

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