Annual / Quarterly Financial Statement • Feb 17, 2023
Annual / Quarterly Financial Statement
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GOFORE PLC $01 - 12/2022$
A record year for Gofore - net sales growth 43%, adjusted EBITA +50%
17 February 2023 Unaudited
| Group Key Figures Summary, MEUR | 2022 | 2021 |
|---|---|---|
| Net sales | 149.9 | 104.5 |
| Organic Growth of Net Sales, % | 32.2% | 13.0% |
| Adjusted EBITA | 22.0 | 14.6 |
| Adjusted EBITA, % | 14.7% | 14.0% |
| EBITA | 20.4 | 14.5 |
| Operating Profit (EBIT) | 16.6 | 12.2 |
| Earnings per share (EPS), undiluted) | 0.78 | 0.61 |
| Earnings per share (EPS), diluted | 0.78 | 0.61 |
| Number of employees at the end of period | 1,297 | 852 |
| Overall capacity; in-house and subcontracted staff (FTE), at the end of period |
1,383 | 926 |
| Group Key Figures Summary, MEUR | H2/2022 | H 2 /2021 |
|---|---|---|
| Net sales | 77.4 | 52.8 |
| Organic Growth of Net Sales, % | 33.2% | 17.6% |
| Adjusted EBITA | 11.3 | 7.7 |
| Adjusted EBITA, % | 14.6% | 14.6% |
| EBITA | 10.3 | 7.7 |
| Operating Profit (EBIT) | 8.4 | 6.5 |
| Earnings per share, EPS (undiluted) | 0.40 | 0.34 |
| Earnings per share, EPS (diluted) | 0.40 | 0.34 |
| Number of employees at the end of period | 1,297 | 852 |
| Overall capacity; in-house and subcontracted staff (FTE), at the end of period |
1,383 | 926 |
Gofore's organic growth 29%, the year's strongest quarter profitability-wise
| Group Key Figures Summary, MEUR | Q4/2022 | Q4/2021 |
|---|---|---|
| Net sales | 45.7 | 31.2 |
| Organic Growth of Net Sales, % | 28.7% | 20.8% |
| Adjusted EBITA | 7.5 | 5.0 |
| Adjusted EBITA, % | 16.5% | 16.0% |
| EBITA | 6.5 | 5.0 |
| Operating Profit (EBIT) | 5.5 | 4.4 |
| Earnings per share, EPS (undiluted) | 0.26 | 0.23 |
| Earnings per share, EPS (diluted) | 0.26 | 0.23 |
| Number of employees at the end of period | 1,297 | 852 |
| Overall capacity; in-house and subcontracted staff (FTE), at the end of period |
1,383 | 926 |
The parent company's distributable assets on 31 December 2022 amounted to EUR 76.2 million, including the profit for the financial period of EUR 12.0 million. The Board of Directors proposes to the Annual General Meeting on 24 March 2023 that based on the balance sheet for the financial period ended on 31 December 2022, dividend be distributed in the amount of EUR 0.34 per share.
Dividend 0.34 euros/share
At the date of the proposal, there are 15,506,132 outstanding shares that yield dividends, equaling a total of 5.3 million euros in dividend payout. According to the proposal, the rest of the profit for the financial period, 6,7 million euros, will be recognised in the company's own equity. The proposed dividend is 43.6% of earnings per share. Of the year 2021 profit, a dividend of 0.28 euros per share was distributed, a total of 4.3 million euros. The 2022 dividend is paid to a shareholder who is on the company's list of shareholders maintained by Euroclear Finland Oy on the record date 28 March 2023. A dividend will not be paid for the shares in the company's possession on the record date. According to the proposal, dividends are paid on estimate on 4 April 2023.
Dividend payout ratio 43.6% of profit
学
Gofore's organic growth has been exceeding both the IT services market overall as well as the company's own targets.
$25%$ minimum annual growth in net sales. At least 15% organic
annual growth
$15%$
Profitability of adjusted EBITA $40%$
Dividends at least of annual net profit
Gofore's strategic focus themes are
Three strategic growth avenues are:
Mikael Nylund
The 20-year jubilee year 2022 was a very good year for Gofore on all accounts important to us: growth, profitability and people development. As much as 43% of net sales growth is based on not only successful partnerships and deepening customer relationships, but also a skilled team. Last year, we recruited as many as 377 new Goforeans, which can be seen in our strong organic growth.
Growth was enabled by the brisk customer demand that remained good throughout the year, despite the dark clouds that gathered on the economy sky. We found it important to be able to continue deepening our good customer relationships. During the year, 82% of net sales came from returning customers, which is also a sign of customer satisfaction. The continuous growth of customer size also tells the same message.
Our private sector customer relationships showed especially strong growth of 64%. This was supported by the Devecto acquisition made in the beginning of the year, which successfully complemented our service offering. Many of our customers are industrial companies operating in a global market, and their good success despite many challenges, supported our good demand. Tomorrow's digitally enhanced products are developed today, and we have been able to successfully help our customers make this happen.
Our strong foundation in the public sector also grew nicely as accustomed to. Its 33% of net sales growth is a sign of us continuing to strengthen our market position and surpassing the previous year's growth (17%). Digitalising the Finnish society is by no means finished and our work continues.
We exceedingly succeeded to create and expand our business outside Finland, and growth there was a record-like 77%. Our focus has especially been the DACH area, and we have been able to grow our position in that market. Our position will be significantly strengthened by the acquisition of German eMundo that brought us the enforcement of some hundred new Goforeans in an important market area for us.
We want to first and foremost be the best possible workplace for our experts. Hence, we are happy to see both the good recruitment success and a favorably lowered attrition rate of 12%.
Our profitability was further improved, adjusted EBITA standing at 14.7%, enabled by strong operative performance. We managed to improve our position as the customers' partner, which enabled raising customer pricing well compared the industry. Despite inflation pressures, salary levels stayed healthy thanks to successful recruitment. This favorable equation and the scalability enabled by our growth platform were behind the improved profitability.
Our profitable growth also creates value to shareholders,
who some half of our Crew is included in. Gofore has in the recent years risen to the best-in-class companies in the IT service sector and is now considered a peer of bigger as well as international companies.
Gofore does not, however, exist only to produce shareholder value. We also want to be an impactful member of society and promote ethical digitalisation with our own work and enabling the work of others. We will propose the Annual General Meeting 2023 a donation to the Gofore Impact foundation we are planning to start. The generally benefitting foundation would support research and give out donations, aids and grants to various projects. This is an idea I am personally very excited about!
We face the year 2023 as a strong, learning team, who is resilient and agile even at the face of changes. The strategy we renewed together with our staff will continue to be based on Gofore's long-term strengths. Our new goal is to understand and solve our customers' challenges on chosen sectors even better than before. We strive to become the very best in the areas that we choose to focus on. I especially wish to thank all Goforeans for a great year, and all other stakeholders in your trust in us.
| EUR thousand, unless otherwise specified |
Q4/2022 | Q3/2022 | Q2/2022 | Q1/2022 | Q4/2021 | Q3/2021 | Q2/2021 | Q1/2021 |
|---|---|---|---|---|---|---|---|---|
| Net sales | 45,686 | 31,717 | 37,120 | 35,398 | 31,203 | 21.627 | 26.446 | 25,232 |
| Change in Net sales, % | 46% | 47% | 40% | 40% | 29% | 33% | 43% | 34% |
| Adjusted EBITA | 7,521 | 3,743 | 5.613 | 5,109 | 4,997 | 2.706 | 3,438 | 3,505 |
| Adjusted EBITA, % | 16.5% | $11.8\%$ | $15.1\%$ | $14.4\%$ | $16.0\%$ | 12.5% | 13.0% | 13.9% |
| Change in Adjusted EBITA, % | 51% | 38% | 63% | $46\%$ | 53% | 44% | 40% | 11% |
| Organic growth of Net sales, % | 29% | 32% | $27\%$ | 23% | $21\%$ | 13% | 9% | 8% |
| Month 2022 (2021) | Net sales, MEUR | No. of employees at end. of period |
No. of working days in Finland |
Full Time Equivalent, FTE | Subcontracting, FTE |
|---|---|---|---|---|---|
| January | 10.8(7.5) | 993 (727) | 20(19) | 917 (679) | 147 (109) |
| February | 11.3(8.1) | 1,015 (736) | 20(20) | 942 (689) | 153 (111) |
| March | 13.3(9.7) | 1,043 (792) | 23(23) | 968 (735) | 155 (118) |
| April | 11.5(8.5) | 1,056 (791) | 19(20) | 988 (743) | 156 (112) |
| May | 13.1(8.8) | 1,068 (799) | 21(20) | 1,004(755) | 163 (109) |
| June | 12.5(9.1) | 1,074 (803) | 21(21) | 1,015(755) | 162 (108) |
| July | 4.1(2.7) | 1,062 (797) | 21(22) | 1,004 (746) | 78 (38) |
| August | 12.9(8.5) | 1,086 (803) | 23(22) | 1,016 (746) | 156 (105) |
| September | 14.8(10.4) | 1,126 (814) | 22(22) | 1,060 (757) | 183 (119) |
| October | 14.6(10.2) | 1,159 (827) | 21(21) | 1,092 (763) | 186 (133) |
| November | 17.2(11.3) | 1,292 (846) | 22(22) | 1,198 (784) | 199 (152) |
| December | 13.9(9.7) | 1,297 (852) | 20(21) | 1,210 (789) | 173 (137) |
| EUR thousand, unless otherwise specified | Q4/2022 | Q4/2021 | Change | H2/2022 | H2/2021 | Change | 2022 | 2021 | Change |
|---|---|---|---|---|---|---|---|---|---|
| Net sales | 45,686 | 31,203 | 14,483 | 77,403 | 52,830 | 24,573 | 149,921 | 104,509 | 45,412 |
| Change in Net sales, % | 46.4% | 28.5% | 46.5% | 30.2% | 43.5% | 34.1% | |||
| EBITDA | 7,124 | 5,598 | 1,526 | 11,456 | 8,947 | 2,509 | 22,736 | 17,062 | 5,674 |
| EBITDA, % | 15.6% | 17.9% | 14.8% | 16.9% | 15.2% | 16.3% | |||
| Adjusted EBITA | 7,521 | 4,997 | 2,524 | 11,265 | 7,703 | 3,562 | 21,987 | 14,646 | 7,341 |
| Adjusted EBITA, % | 16.5% | 16.0% | 14.6% | 14.6% | 14.7% | 14.0% | |||
| EBITA | 6,503 | 4,988 | 1,515 | 10,265 | 7,694 | 2,571 | 20,426 | 14,451 | 5,975 |
| EBITA, % | 14.2% | 16.0% | 13.3% | 14.6% | 13.6% | 13.8% | |||
| Operating Profit (EBIT) | 5,533 | 4,402 | 1,131 | 8,367 | 6,522 | 1,845 | 16,637 | 12,197 | 4,440 |
| Operating Profit (EBIT), % | 12.1% | 14.1% | 10.8% | 12.3% | 11.1% | $11.7\%$ | |||
| Profit for the period | 4,162 | 3,507 | 654 | 6,246 | 5,129 | 1,117 | 12,223 | 9,073 | 3,149 |
| Earnings per share (EPS), undiluted | 0.26 | 0.23 | 0.40 | 0.34 | 0.78 | 0.61 | |||
| Earnings per share (EPS), diluted | 0.26 | 0.23 | 0.40 | 0.34 | 0.78 | 0.61 | |||
| Effective dividend yield (DPS/Price), % | 1.5% | 1.2% | |||||||
| Price-Earnings ratio, P/E | 28.5 | 39.3 | |||||||
| Return on equity (ROE), % | 21.8% | 23.6% | 16.7% | 17.5% | 17.3% | 18.6% | |||
| Return on investment (ROI), % | 23.1% | 23.7% | 17.6% | 17.6% | 18.8% | 19.1% | |||
| Equity ratio, % | 54.0% | 61.5% | 54.0% | 61.5% | 54.0% | 61.5% | |||
| Net gearing, % | $-29.5%$ | $-41.1%$ | $-29.5%$ | $-41.1%$ | $-29.5%$ | $-41.1%$ | |||
| Number of employees at the end of period | 1,297 | 852 | 445 | 1,297 | 852 | 445 | 1,297 | 852 | 445 |
| Average overall capacity, FTE | 1,167 | 779 | 388 | 1,097 | 764 | 332 | 1,035 | 745 | 289 |
| Average subcontracting, FTE | 186 | 141 | 45 | 162 | 114 | 48 | 159 | 113 | 46 |
All key figure calculation methods are explained in section "Calculation formulas for key figures"
(Brand awareness study 2022, respondents were not current customers)
Our continuously developing Digital Society focus sector can entail both public sector parties and private companies that are parts of the same societal ecosystem.
Our long-term Metso Outotec collaboration is a great example of a deepening customer relationship.
| Customer | Project | Topic | ~Value, MEUR | Years |
|---|---|---|---|---|
| Tax Administration | Real Time Economy | Financial ecosystem | 2.5 | $\overline{2}$ |
| City of Helsinki | Haitaton | Construction site hazard monitoring | 2.6 | $\overline{2}$ |
| City of Helsinki | ASTI | Early childhood education services | 4,9 | $\overline{2}$ |
| City of Helsinki | City services and design | Application development | 5.0 | 2+until further notice |
| Finnish Institute for Health and Welfare |
Project management | Health and social reform | $3 - 7$ | $3+2$ (option) |
| East Uusimaa wellbeing service county |
Consultancy, project management | Health and social reform | 3 | $2+2$ (option) |
| Lapland wellbeing service county | Consultancy, project management | Health and social reform | 3.8 | 4 |
| State Treasury | Information system and website | State budget | 2.6 | $\overline{2}$ |
| Ministry of Agriculture and Forestry 1) |
Cloud service development | Wide IT services tender | $-1)$ | $4+2$ (option) |
| CSC IT Center for Science | Digivisio 2030 | Digital pedagogy development | 8.75 | 4 |
1) Tendering carried out by the National Land Survey included the Ministry of Agriculture and Forestry as well as offices in its administration; National Land Survey, National Resources Institute of Finland Luke, Finnish Food Safety Authority and Metsähallitus (state forest enterprise). There is no estimate on the value of the agreements, as all offices make their own frame agreements following the joint tendering in the fall.
Strong employer brand and investment into work satisfaction sped up growth in 2022
Recruitment growth 76 %
Net sales growth 2022 17%
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Net sales growth 2022 30%
Gofore Plc's Shareholders' Nomination Board's proposals to the Annual General Meeting 2023
Gofore's net sales in January 2023 as expected. 20 Jan 2023: The Shareholders' Nomination Board made proposals to the Annual General Meeting 2023 of the number of members of the Board of Directors and changes in the remuneration of the Chairman and members of the Board.
The entire release: https://gofore.com/en/news/goforesshareholders-nomination-boards-proposals-to-the-annual-generalmeeting-2023/
January started the year according to expectations. Typical for turn of the year, project discontinuities affected January billing rates as accustomed to, making it lower than the year-end's good level. Although the good demand of the year-end mainly continued, mild caution has been detected in starting new projects.
| KEY FIGURES | Net sales, MEUR |
LTM pro : forma i |
No. of $\blacksquare$ Employees in |
Capacity, FTE | Overall Subcontracting No. of Working | $FTE$ Days in Finland |
|---|---|---|---|---|---|---|
| January 2023 (January 2022) |
15.8(10.8) | 160.6 | 1,318 (993) | 1,225(917) | 186 (147) | 21(20) |
Digital transformation's outlook is strong in the mid and long term. Short-term outlook is shadowed by the macroeconomical uncertainty that affects customer demand.
2023 started with high uncertainty about the direction of the economy. While a downturn in economic activity would also affect the willingness to invest into digital development in the short-term, there are also positive signs of a turn in conjuncture towards continued growth in 2024. For Gofore, the good growth momentum and customer demand carries, but the above aforementioned macro-economic factors are expected to impact customer demand during the year. The digitalisation megatrend continues to strengthen customer demand in the medium and long-term.
Finnish public sector digitalisation continues actively. Big structural reforms - especially social and healthcare reform are continuing. This is reflected on the high level of active development activities at the start of 2023. This activity is expected to continue through 2023 and beyond. A possible downturn in economic activity and deepening deficit in public finances will affect public spending. The effect on digital investments is mostly subject to political decision making of the next Finnish government.
The parliamentary elections in April 2023 show the way for future politics regarding digitalisation of society. The elections themselves are expected to slow down tender activity for a period of time. For Gofore, public sector demand is expected to grow steadily, possibly with the exception of the period of elections. A potential slowdown of demand from private sector may increase competition for public sector tenders. Gofore's strong position in bigger development programs is a competitive edge compared to most of the competition.
Digital transformation remains a high priority for private companies. However, their willingness to invest is affected by the economic cycle. Many companies in Gofore's focus markets entered the year 2023 with a good order backlog, but with risk of slower order intake. If the slower cycle is protracted, the risk of postponing investments also rises. For Gofore's Intelligent Industry sector, a national plan and legislation to raise R&D funding (to 4% of GDP by 2030), is expected to support customer demand.
International markets relevant to Gofore are subject to the same macro-economic changes as described above.
The German and the whole DACH market are of special relevance to Gofore, and we expect to see a downturn in the economy in 2023 on those areas. Geopolitical turmoil affects global markets heavily. For Gofore this is relevant especially through the outlook of globally operating customers companies. Public investments in digital development are growing in Europe. Market entry into local markets is not easy but is aided by the advanced development in Finland and the Nordic countries.
In the medium and long-term, the talent market is expected to remain competitive in all geographies where Gofore operates. Gofore has proven competitiveness as an attractive employer and a good operative ability to recruit. In the short-term, the weaker economic cycle and related slower recruiting and layoffs by especially SaaS companies supports fulfilling recruitment goals.
Wage inflation in the market is driven by talent shortage and strengthened by inflation in the economy. Gofore expects some pressure on margins, with company-wide wage agreement alleviating pressure to an extent.
Economical uncertainty has significantly grown in 2023. Uncertainty of the economy and economic growth is seen in investments. Inflation and a changed interest situation affect the operating environment. Impacts on Gofore are related to inflation developments and general customer demand. Adding costs raised by the inflation on customer pricing has gone well so far. There has been no sign of essential weakening of customer demand.
The public sector is more resilient to macro-economical changes than the private sector. Weakening public economy may affect the public sector's IT investment. Finnish parliamentary elections in April 2023 are expected to temporarily affect market activity. Gofore believes its public sector market position is strong and therefore sees this risk as very low.
Companies are more vulnerable to political situation or country-specific macro-economical risks. Especially Finnish export companies have on average a strong order intake in the start 2023. Gofore currently sees this risk as medium. In the mid and long term, digitalisation is high on private company agendas, and Gofore's offering creates high added value to customers.
Demand for skilled workforce continues high in the industry. Short-term uncertainty of the economy has slowed down the labor market, as e.g. international technology businesses and SaaS companies have slowed down recruitment and even laid off staff. Despite this, Gofore only sees a low risk here, thanks to its strong employer brand and the flexible work it enables.
Gofore intends to continue disciplined acquisitions by acquiring companies that fit its strategy. The M&A market has slowed down somewhat with the developments of the economical situation. Integration of acquired companies includes uncertainty. In Finland, Gofore is an experienced, valued buyer. In the new market area, German-speaking Europe, it faces a higher risk.
Russia's invasion was or the limitations imposed on the country continue to have very little direct impact on Gofore. Gofore has no operations in Russia, Ukraine or Belorussia. The conflict has had a negative impact on some customer businesses.
As of February 2022, Gofore has not provided forecasts about the revenue or profit for the financial year. Before, Gofore may have presented an estimate of the company's revenue or performance guidance in the financial statement release or half-year report.
Gofore continuously develops the content of its monthly business reviews and interim reports, in an effort to further improve the company's transparency and more real-time monitoring of financial developments.
January-December 2022
Unaudited
At the end of December 2022, the Group employed a total of 1,297 (852) employees. The number of personnel increased from the corresponding period in 2021 by 52%. Growth was created both organically and by the acquisitions carried out.
The number of employees in Finland amounted to 1,146 (814), and in the other countries of operation to a total of 151 (38) employees.
Gofore's offices are located in Helsinki, Espoo, Jyväskylä, Tampere, Oulu, Kajaani, Lappeenranta and Turku. Offices located outside of Finland are in Brunswick, Ingolstadt, Klagenfurt, Munich, Stuttgart and Frankfurt in Germany, Salzburg in Austria, Bolzano in Italy, Madrid and Málaga in Spain, and Tallinn in Estonia.
On 3 January 2022, Gofore announced it had acquired the entire share capital of Devecto Oy, a company specialised in software development and testing of smart devices and machinery, and related testing systems, for 21 million euros.
On 27 October 2022, Gofore announced it has acquired the entire share capital of eMundo GmbH, a digitalisation consultancy and software company, for 8 million euros.
Both purchase price allocations and estimates on potential additional purchase prices are presented in the section "Notes to the Accounts", pages 46 and 47.
During January-December 2022, Gofore's net sales increased by 43% compared to the corresponding period in 2021, amounting to EUR 149.9 (104.5) million.
Growth was attributable to both the Devecto and eMundo acquisitions and strong, 32%, organic growth. The average hourly price of services sold also increased somewhat.
Net sales generated from public sector sales increased to EUR 90.1 (67.9) million.
Net sales generated from the private sector grew by as much as 64% to EUR 59.8 (36.6) million. The eMundo, Devecto and CCEA acquisitions have contributed to the private sector sales growth.
The public sector's share of total net sales was 60 $(65)$ % and private sector's 40 $(35)$ %.
Net sales coming from Finland was EUR 134.0 (95.5) million, representing an 89 (91)% share of Group net sales. Other countries' share of Group net sales was 11 (9)%; EUR 16.0 (9.0) million.
Subcontracted work represented a 20 (19)% share of Group net sales; EUR 29.6 (20.3) million.
July-December 2022
During the period of July-December 2022, Gofore's net sales increased by 47% compared to the corresponding period in 2021, and amounted to EUR 77.4 (52.8) million.
The growth was primarily attributable to corporate acquisitions and organic growth., 33%
During the period of January - December 2022, Gofore's adjusted EBITA increased by 50% compared to the corresponding period in 2021 and amounted to EUR 22.0 (14.6) million and accounted for 14.7 (14.0)% of net sales.
Adjusted EBITA for the period was affected by an adjustment of corporate acquisition transaction costs by EUR 1.6 million. Adjusted EBITA in the comparison period was affected by a EUR 0.2 million adjustment of acquisition transaction costs. The calculation method of the adjusted EBITA is presented separately in the section "Calculation formulas for key figures".
EBITA for January - December 2022 amounted to EUR 20.4 (14.5) million and accounted for 13.6 $(13.8)\%$ of net sales.
The proportion of personnel expenses of net sales rose somewhat from the level of the comparison period in 2021, accounting for 56.8 (56.4)%. Personnel expenses in January - December 2022 amounted to EUR 85.2 (58.9) million. Growth is based on the growth of the number of employees.
Other operating expenses amounted to EUR 17.4 (11.2) million; 11.6 (10.7)% of net sales. Without transaction costs related to acquisitions, the proportion would have been 10.5 (10.6) %. The largest expense items included other personnel expenses, ICT expenses and external services. Depreciations excluding amortizations of intangible assets related to acquisitions were EUR 2.3 (2.6) million, accounting for 1.5 (2.5)% of net sales. Depreciations and amortizations were 6.1 (4.9) million euros; 4.1 (4.7)% of net sales.
Operating profit (EBIT) in January - December 2022 amounted to EUR 16.6 (12.2) million and accounted for 11.1 (11.7)% of net sales. Finance costs and income were EUR $-0.8$ ( $-0.9$ ) million. Costs in the comparison period were increased due to discounted financing expenses of contingent considerations.
Profit for the financial period amounted to EUR 12.2 (9.1) million, showing 35% growth.
During the period of July-December 2022, adjusted EBITA amounted to EUR 11.3 (7.7) million; 14.6 (14.6)% of net sales. Adjusted EBITA was significantly improved during the second half, showing a further 46% growth.
The Group's liquidity is good and financing position strong.
On 31 December 2022, Gofore's equity ratio was 54.0 (61.5)%, with net gearing of -29.5 $(-41.1)\%$ .
At the end of December 2022, balance sheet total of the Gofore Group amounted to EUR 148.4 (101.9) million, of which total equity accounted for EUR 79.8 (61.3) million. At the end of the review period, interest-bearing net debt amounted to EUR-23.6 (-25.2) million.
Cash flow from operations improved over the period of January-December 2022 to EUR 21.7 (14.2) million. The cash flow from investments during the review period amounted to EUR -18.1 (-10.0) million.
Investments in subsidiary shares during the review period amounted to EUR 17.5 (9.9) million. Cash flow from financing activities during the period amounted to EUR 1.4 (13.6) million, including paid dividends of EUR-4.4 million, repayments of lease agreement liabilities for EUR-1.9 million, withdrawals of new loans for EUR 11.5 million and loan amortisations for EUR-3.8 million.
At the end of the review period, cash assets amounted to EUR 44.1 (39.1) million.
At the end of the review period, Gofore Plc's unsecured loans from credit institutions amounted to EUR 18.1 (10.1) million. Gofore raised a new unsecured loan of EUR 11.5 million during the review period. The company has interest rate cap and swap agreements in use to hedge the loans. Further information on this can be found in Notes to the Accounts / Financing, related party transactions and commitments.
The loans are associated with the customary covenants tied to the equity ratio and interest-bearing net debt. The covenant conditions were met on 31 December 2022. In addition, Gofore has in its disposal an EUR 5 million binding, unsecured credit limit for the Group's short-term, general financing needs such as corporate acquisitions. The limit was not used during the review period.
The company's development activity in the reporting period was focused on enhancing its digital platform and enterprise resource management system.
January-December 2022
Gofore Plc's share is quoted on the official stock exchange list of Nasdaq Helsinki Ltd; share trading code GOFORE.
At the end of the reporting period on 31 December 2022,
544
Market value at the end of December, MEUR
$-7.5\%$
Share price 12-month value change
26.00 Highest price, EUR
At the end of the reporting period on 31 December 2022:
• Gofore received no flagging notifications in January-December 2022.
5,879 Shareholders at the end of December
55.3%
Household ownership
$26.7\%$ Financial and insurance institutions ownership
31
Gofore has had a share savings plan called CrewShare open to its entire staff since 2018. In January 2022, the Board of Directors resolved on a new plan period for 2022-2023, as well as on a new Performance Share Plan for key people.
The plan is available to all Gofore Group's employees, who are offered the possibility to save monthly and invest in shares in the company at a 10 per cent discount, if the Board of Directors of the company so decides. The accrued savings are allocated towards acquiring Gofore's shares after the expiration of the savings period.
The new plan period commenced on 1 March 2022 and ends on 28 February 2023. Employees will be offered an opportunity to save a proportion of their regular salaries (EUR 50-400 per month). The accrued savings will be used for the acquisition of the Gofore shares biannually following the publications of the Half-year Report in September 2022 and financial statements release for the year 2022 in March 2023.
A total of 645 Gofore Group employees participated in CrewShare in 2022.
In January 2022, the Board of Directors of Gofore Plc also decided to establish a new share-based incentive plan for the group's key personnel. The aim is to align the objectives of the shareholders and key personnel for increasing the value of the company in the long-term, to commit the key employees to work for the company and to offer them a competitive incentive scheme that is based on earning and accumulating shares.
The Performance Share Plan 2022-2024 consists of a three-year performance period, covering the financial years in question. The Board may decide annually on new performance periods.
26 persons, including the CEO and other management team members, currently belong in this plan.
Read more: https://gofore.com/en/releases/gofore-plcgofore-resolved-on-incentive-plans-for-the-groupsemployees-and-key-personnel/
The Annual General Meeting adopted the company's financial statements for the financial period from 1 January-31 December 2021.
The Annual General Meeting confirmed a dividend of EUR 0.28 per share to be paid for the financial period 1 January-31 December 2021. The total amount of dividend is EUR 4,303,690.16, calculated on the basis of the outstanding shares as per the day of the Annual General Meeting. The record date for the dividend distribution will be 29 March 2022 and the dividend payment date will be 5 April 2022.
It was resolved to discharge the members of the Board of Directors and the CEO from liability for the financial period of 1 January-31 December 2021.
It was resolved to adopt the Remuneration Report for the Governing Bodies.
It was resolved that the remuneration for the Chair of the Board is EUR 3,500 per month and for the members of the Board EUR 2,000 per month. In addition, it was approved that the Shareholders' Nomination Board proposes that each Board Member be paid a fee for each committee meeting as follows: The Chair of the Committee should be paid EUR 800 and the other committee members EUR 400 for each meeting. All members of the Board will be compensated for travel expenses against receipt in accordance with the company's travel policy.
It was resolved that the Board of Directors consists of six members.
Directors: Eveliina Huurre and Tapani Liimatta as new members and Mammu Kaario, Piia-Noora Kauppi, Timur Kärki and Sami Somero as old members.
It was resolved that the auditor's remuneration is paid against the invoices approved by the company.
KPMG Oy Ab was re-elected as the company's auditor for a term that will continue until the end of the next Annual General Meeting. KPMG Oy Ab has announced that Lotta Nurminen APA, would be the Auditor with principal responsibility.
All resolutions of the AGM can be seen at https://gofore.com/en/invest/governance/agm2022/
takes place on 24 March 2023. Follow the preparations at: https://gofore.com/en/invest/governance/annual-generalmeeting-2023/
Authorising the Board of Directors to resolve on the repurchase of the Company's own shares and/or accepting them as a pledge
The Annual General Meeting authorised the Board of Directors to resolve on the acquisition of the company's own shares of a maximum of 1,534,404 shares and/or accepting the same number of the company's own shares as a pledge, in one or more tranches by using funds in the unrestricted shareholders' equity. The maximum number of shares to be acquired and/or accepted as a pledge corresponds to approximately 10% of the total number of shares of the company based on the date of the notice to the Meeting. However, the company, together with its subsidiaries, may not hold or accept as a pledge more than 10% of the total number of shares of the company at any time.
Shares will be acquired otherwise than in the proportion of shareholders' holdings in public trading arranged by Nasdaq Helsinki Ltd. at market price at the time of acquisition or otherwise at market price. The authorisation is granted for the purposes of, among others, executing potential acquisitions and share-based incentive schemes or for other purposes determined by the Board of Directors and otherwise to be further assigned, to be held at the ownership of the company or to be annulled by the company. The Board of Directors decides on all other conditions for acquiring own shares and/or accepting them as a pledge.
This authorisation cancels the authorisation given by the Annual General Meeting on 26 March 2021 to resolve on the repurchase of the company's own shares. The authorisation is valid until the closing of the next Annual General Meeting, however, no longer than 30 June 2023.
Authorising the Board of Directors to resolve on the issuance of shares and the issuance of option rights and other special rights entitling to shares
The Annual General Meeting authorised the Board of Directors to resolve on the issuance of shares as well as the issuance of option rights and other special rights entitling to shares referred to in chapter 10, section 1 of the Finnish Limited Liability Companies Act, in one or several tranches, either against payment or without payment.
The total number of shares to be issued, including shares under options and other special rights, may amount to a maximum of 2,301,606 shares, equivalent to approximately 15% of the total number of shares of the company on the date of the notice to the meeting. The Board of Directors may decide to issue new shares or to transfer own shares that may be held by the company.
The authorisation entitles the Board of Directors to decide on all terms and conditions related to the issuance of shares and the issuance of option rights and special rights entitling to shares, including the right to deviate from the shareholders' pre-emptive subscription rights. The authorisation is to be used as consideration for acquisitions, partly as a company incentive scheme or for other purposes determined by the Board of Directors.
The authorisation is valid until 30 June 2023. The authorisation revokes all previous unused authorisations of the Board of Directors to resolve on the issuance of shares, issuance of share options and issuance of other special rights entitling to shares.
1 Jan - 31 December 2022 Tables Section
Unaudited
| EUR thousand | Q4/2022 | Q4/2021 | Change | H2/2022 | H2/2021 | Change | 2022 | 2021 | Change |
|---|---|---|---|---|---|---|---|---|---|
| Net sales | 45,686 | 31,203 | 46% | 77,403 | 52,830 | 47% | 149,921 | 104,509 | 43% |
| Production for own use | 102 | $-79$ | $< -100%$ | 210 | 36 | $>100\%$ | 305 | 140 | $>100\%$ |
| Other operating income | 86 | 38 | $>100\%$ | 100 | 48 | $>100\%$ | 126 | 128 | $-2%$ |
| Materials and services | $-7,510$ | $-5,553$ | 35% | $-13,264$ | $-9,133$ | 45% | $-25,073$ | $-17,547$ | 43% |
| Employee benefit expenses | $-25,757$ | $-16,686$ | 54% | $-43,700$ | $-29,055$ | 50% | $-85,150$ | $-58,943$ | 44% |
| Depreciations, amortisations and impairment | $-1,591$ | $-1,195$ | 33% | $-3,088$ | $-2,425$ | 27% | $-6,099$ | $-4,865$ | 25% |
| Other operating expenses | $-5,482$ | $-3,325$ | 65% | $-9,295$ | $-5,779$ | 61% | $-17,394$ | $-11,226$ | 55% |
| Operating profit (EBIT) | 5,533 | 4,402 | 26% | 8,367 | 6,522 | 28% | 16,637 | 12,197 | 36% |
| Finance costs | $-260$ | $-93$ | >100% | $-418$ | $-146$ | $>100\%$ | $-824$ | $-902$ | $-9%$ |
| Finance income | 46 | 12 | $>100\%$ | 53 | 17 | $>100\%$ | 60 | 40 | 52% |
| Profit before tax | 5,320 | 4,322 | 23% | 8,002 | 6,393 | 25% | 15,873 | 11,335 | 40% |
| Income tax | $-1,158$ | $-814$ | 42% | $-1,756$ | $-1,263$ | 39% | $-3,650$ | $-2,261$ | 61% |
| Profit for the financial period | 4,162 | 3,507 | 19% | 6,246 | 5,129 | 22% | 12,223 | 9,073 | 35% |
| Other Comprehensive Income | |||||||||
| Net other comprehensive profit or loss to be reclassified to profit or loss in | |||||||||
| subsequent periods | |||||||||
| Exchange differences on translation of foreign operations | $\overline{0}$ | $\overline{9}$ | $\sim$ | $\Omega$ | $\overline{9}$ | $\sim$ | $\Omega$ | 12 | |
| Cash flow hedges | 47 | $\overline{O}$ | 260 | $\overline{0}$ | 542 | $\overline{0}$ | |||
| Other comprehensive income, net of tax | 47 | 9 | >100% | 260 | $\overline{9}$ | >100% | 542 | 12 | $>100\%$ |
| Total comprehensive income for the financial period | 4,209 | 3,516 | 20% | 6,506 | 5,138 | 27% | 12,765 | 9,086 | 40% |
| Profit/loss for the financial period attributable to: | |||||||||
| Equity holders of the parent | 4,044 | 3,457 | 17% | 6,087 | 5,049 | 21% | 11,954 | 8,953 | 34% |
| Non-controlling interests | 118 | 50 | >100% | 159 | 81 | 97% | 269 | 120 | $>100\%$ |
| 4,162 | 3,507 | 19% | 6,246 | 5,129 | 22% | 12,223 | 9,073 | 35% | |
| Total comprehensive income for the financial period attributable to: | |||||||||
| Equity holders of the parent | 4,091 | 3,466 | 18% | 6,347 | 5,058 | 25% | 12,496 | 8,966 | 39% |
| Non-controlling interests | 118 | 50 | $>100\%$ | 159 | 81 | 97% | 269 | 120 | $>100\%$ |
| 4,209 | 3,516 | 20% | 6,506 | 5,138 | 27% | 12,765 | 9,086 | 40% | |
| Earnings per share (EPS), undiluted | 0.26 | 0.23 | 0.03 | 0.40 | 0.34 | 0.06 | 0.78 | 0.61 | 0.17 |
| Earnings per share (EPS), diluted | 0.26 | 0.23 | 0.03 | 0.40 | 0.34 | 0.06 | 0.78 | 0.61 | 0.17 |
| EUR thousand | 2022 | 2021 | Change |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Goodwill | 47,694 | 26,897 | 77% |
| Other intangible assets | 22,465 | 11,257 | 100% |
| Tangible assets | 751 | 427 | 76% |
| Right-of-use assets | 3,564 | 4,409 | $-19%$ |
| Other receivables | 917 | 1 | $>100\%$ |
| Deferred tax assets | 147 | 37 | $>100\%$ |
| Total non-current assets | 75,537 | 43,029 | 76% |
| Current assets | |||
| Trade receivables | 24,248 | 15,980 | 52% |
| Contract assets | 465 | 709 | $-34%$ |
| Other current assets | 2,826 | 2,346 | 20% |
| Income tax receivables | 140 | 144 | $-3%$ |
| Securities | 1,077 | 575 | 87% |
| Cash and cash equivalents | 44,135 | 39,114 | 13% |
| Total current assets | 72,890 | 58,869 | 24% |
| Total assets | 148,427 | 101,898 | 46% |
| EUR thousand | 2022 | 2021 | Change |
|---|---|---|---|
| Equity and liabilities | |||
| Equity | |||
| Share capital | 80 | 80 | 0% |
| Fund for unrestricted equity | 49,897 | 40,103 | 24% |
| Other reserves | 542 | $\Omega$ | |
| Retained earnings | 28,764 | 20,822 | 38% |
| Equity attributable to equity holders of the parent |
79,283 | 61,005 | 30% |
| Non-controlling interests | 475 | 304 | 57% |
| Total equity | 79,759 | 61,309 | 30% |
| Non-current liabilities | |||
| Interest-bearing loans and borrowings | 13,464 | 7,450 | 81% |
| Other payables | 3,196 | $\Omega$ | |
| Lease liabilities | 1,464 | 2,644 | $-45%$ |
| Deferred tax liabilities | 4,664 | 2,111 | $>100\%$ |
| Total non-current liabilities | 22,788 | 12,205 | 87% |
| Current liabilities | |||
| Trade and other payables | 21,480 | 11,199 | 92% |
| Contract liabilities | 688 | 2,217 | $-69%$ |
| Interest-bearing loans and borrowings | 4,593 | 2,600 | 77% |
| Lease liabilities | 2,141 | 1,807 | 18% |
| Accrued expenses | 15,750 | 10,028 | 57% |
| Income tax payable | 1,229 | 533 | >100% |
| Total current liabilities | 45,881 | 28,384 | 62% |
| Total liabilities | 68,668 | 40,589 | 69% |
| Total equity and liabilities | 148,427 | 101,898 | 46% |
| 2022 | ||||||||
|---|---|---|---|---|---|---|---|---|
| EUR thousand | Share capital | Fund for unrestricted equity |
Reserve for fair value | Translation differences |
Retained earnings | Total | Non-controlling interests |
Total equity |
| Equity on 1 of January 2022 | 80 | 40,103 | 0 | 0 | 20,822 | 61,005 | 304 | 61,309 |
| Profit for the period | 11,954 | 11,954 | 269 | 12,223 | ||||
| Other comprehensive income | 542 | 542 | 542 | |||||
| Total comprehensive income | 0 | $\mathbf{0}$ | 542 | 0 | 11,954 | 12,496 | 269 | 12,765 |
| Transactions with shareholders and non-controlling interests: | ||||||||
| Share-based payments | 1,042 | 297 | 1,340 | 1,340 | ||||
| Dividends | $-4,304$ | $-4,304$ | $-131$ | $-4,434$ | ||||
| Acquisition of a subsidiary paid in shares | 8,715 | 8,715 | 8,715 | |||||
| Change in non-controlling interests | 37 | $-6$ | 31 | 34 | 65 | |||
| Equity on 31 of December 2022 | 80 | 49,897 | 542 | 0 | 28,764 | 79,283 | 475 | 79,759 |
| 2021 | Attributable to equity holders of the parent | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| EUR thousand | Share capital | Fund for unrestricted equity |
Reserve for fair value | Translation differences |
Retained earnings | Total | Non-controlling interests |
Total equity | |
| Equity on 1 of January 2021 | 80 | 20,515 | $-12$ | 15,476 | 36,059 | 23 | 36,082 | ||
| Profit for the period | 8,953 | 8,953 | 120 | 9,073 | |||||
| Other comprehensive income | 12 | 12 | $\Omega$ | 12 | |||||
| Total comprehensive income | $\Omega$ | n | $\Omega$ | 12 2 | 8,953 | 8,966 | 120 | 9,086 | |
| Transactions with shareholders and non-controlling interests: | Contractor Contract Contract |
||||||||
| Share-based payments | 571 | 192 | 763 | 763 | |||||
| Dividends | $-3,373$ | $-3,373$ | $-3,373$ | ||||||
| Share issue | 19,017 | -426 | 18,592 | 8 | 18,600 | ||||
| Purchase of own shares | $-1$ | $-1$ | |||||||
| Change in non-controlling interests | $-1$ | $-0$ | -1 | 152 | 151 | ||||
| Equity on 31 of December 2021 | 80 | 40,103 | 0 | $\mathbf{O}$ | 20,822 | 61,005 | 304 | 61,309 |
G
| EUR thousand | H2/2022 | H2/2021 | Change | 2022 | 2021 | Change |
|---|---|---|---|---|---|---|
| Operating activities | ||||||
| Profit before tax | 8,002 | 6,393 | 25% | 15,873 | 11,335 | 40% |
| Adjustments to reconcile profit before tax to net cash flows: | ||||||
| Depreciation and impairment | 3,088 | 2,425 | 27% | 6,099 | 4,865 | 25% |
| Finance income and expenses | 365 | 129 | $>100\%$ | 764 | 862 | $-11%$ |
| Other adjustments | 873 | 458 | 90% | 1,406 | 762 | 85% |
| Change in working capital | 955 | 1,436 | $-33%$ | 1,799 | $-334$ | $< -100%$ |
| Interest received and paid | $-117$ | $-129$ | $-10%$ | $-210$ | $-226$ | $-7%$ |
| Other financial items | $-20$ | $-9$ | $>100\%$ | $-79$ | $-666$ | $-88%$ |
| Income tax paid | $-1,975$ | $-1,342$ | 47% | $-3,911$ | $-2,410$ | 62% |
| Net cash flow from operating activities | 11,172 | 9,361 | 19% | 21,740 | 14,187 | 53% |
| Net cashflow from investing activities | ||||||
| Proceeds from sale of tangible assets | 12 | 5 | $>100\%$ | 65 | 5 | >100% |
| Purchase of intangible assets | $-217$ | $-36$ | $>100\%$ | $-312$ | $-140$ | >100% |
| Purchase of tangible assets | $-203$ | $-38$ | $>100\%$ | $-355$ | $-60$ | $>100\%$ |
| Acquisition of a subsidiary, net of cash acquired | $-3,337$ | $-1,188$ | $>100\%$ | $-17,486$ | $-9,853$ | 77% |
| Net cash flow from investing activities | $-3,746$ | $-1,257$ | >100% | $-18,089$ | $-10,047$ | 80% |
| Net cash flow from financing activities | ||||||
| Treasury shares acquired | $\overline{O}$ | $-1$ | $\sim$ | $\Omega$ | $-1$ | |
| Repayment of lease liabilities | $-1,003$ | $-1,088$ | $-8%$ | $-1,949$ | $-2,189$ | $-11%$ |
| Proceeds from borrowings | 3,500 | $\Omega$ | 11,500 | 3,000 | $>100\%$ | |
| Repayment of borrowings | $-1,877$ | $-1,300$ | 44% | $-3,802$ | $-2,450$ | 55% |
| Financial instruments | $\overline{0}$ | $\overline{0}$ | $-10$ | $\overline{O}$ | ||
| Share issue | $\overline{O}$ | $\overline{O}$ | $\sim$ | $\overline{0}$ | 19,017 | $\sim$ |
| Transaction costs on issue of shares | $\overline{O}$ | $-1$ | $\Omega$ | $-426$ | L. | |
| Dividends paid to equity holders of the parent | $\overline{O}$ | $\overline{O}$ | $\sim$ | $-4,304$ | $-3,373$ | 28% |
| Dividends paid to non-controlling interest | $\overline{O}$ | $\overline{0}$ | $-131$ | $\overline{O}$ | $\sim$ | |
| Changes in non-controlling interest | 52 | $\Omega$ | 65 | $\Omega$ | ||
| Net cash flow from financing activities | 672 | $-2,390$ | $< -100%$ | 1,370 | 13,580 | $-90%$ |
| Net increase in cash and cash equivalents | 8,098 | 5,714 | 42% | 5,021 | 17,719 | $-72%$ |
| Cash and cash equivalents at beginning of period | 36,037 | 33,399 | 8% | 39,114 | 21,394 | 83% |
| Cash and cash equivalents at end of period | 44,135 | 39,114 | 13% | 44,135 | 39,114 | 13% |
1 Jan - 31 December 2022
This unaudited Financial Statements release was prepared in accordance with the IAS 34 Interim Reports standard. Information concerning the full year 2021 is based on the audited financial statements for 2021.
Gofore has changed the accounting policy regarding hedge accounting under IFRS 9 regarding interest rate cap agreements as of 1 January 2022. Efficient share of fair value changes is recognized in the Income Statement's Other comprehensive income (OCI) and presented in fair value reserves in equity.
The inefficient share of hedging is recognized in financial costs in profit and loss statement. Fair value reserves in equity are booked through profit and loss when the hedged item has a profit impact.
Otherwise, the Financial Statements Release is prepared according to the same accounting policies as the Financial Statements for 2021. Amendments to the standards taking effect in 2022 did not affect the Group.
The fair values of financial assets and liabilities are materially consistent with their carrying amounts. For this reason, they are not presented separately in table format in this half-year report. Disclosures concerning share-based payments are presented in the Corporate Governance section / Share Information.
| EUR thousand, unless otherwise specified | Q4/2022 | Q4/2021 | Change, % | H 2 /2022 | H 2 /2021 | Change, % | 2022 | 2021 | Change, % |
|---|---|---|---|---|---|---|---|---|---|
| Net sales by customer sector | |||||||||
| Private sector sales | 17,840 | 10,397 | 72% | 30,785 | 18,154 | 70% | 59,840 | 36,570 | 64% |
| Public sector sales | 27,846 | 20,806 | 34% | 46,618 | 34,676 | 34% | 90,081 | 67,939 | 33% |
| Net sales by origin of customer | |||||||||
| Finland | 39,990 | 28,467 | 40% | 68,107 | 48,275 | 41% | 133,955 | 95,463 | 40% |
| Other countries | 5,696 | 2,736 | 108% | 9,296 | 4,555 | 104% | 15,966 | 9,046 | $77\%$ |
| Net sales by Crew / subcontracting | |||||||||
| Net sales, Crew | 36,803 | 24,693 | 49% | 61,680 | 42,203 | 46% | 120,291 | 84,226 | 43% |
| Net sales, subcontracting | 8,883 | 6,510 | 36% | 15,723 | 10,627 | 48% | 29,630 | 20,283 | 46% |
| Net sales by agreement types | |||||||||
| Time and material based projects | 42,551 | 28,345 | 50% | 72,158 | 47,765 | 51% | 139,261 | 94,199 | 48% |
| Fixed price projects | 2,397 | 2,240 | 7% | 3,893 | 3,812 | 2% | 8,004 | 7,544 | 6% |
| Maintenance services | 710 | 538 | 32% | 1,292 | 1,033 | 25% | 2,546 | 2,351 | 8% |
| Third party commissions | 28 | 80 | $-65%$ | 60 | 220 | $-73%$ | 110 | 416 | $-74%$ |
| Net sales, Group total | 45,686 | 31,203 | 46% | 77,403 | 52,830 | 47% | 149,921 | 104,509 | 43% |
$\blacksquare$
| EUR thousand | Trademarks | Customer relationships |
Non-compete agreement |
Technology based intangibles |
Models and templates |
Capitalized development expenditure |
Other intangible assets |
Other intangible assets total |
Goodwill | Intangible assets total |
|---|---|---|---|---|---|---|---|---|---|---|
| Cost | ||||||||||
| 1 January 2022 | 672 | 10,031 | 3,438 | 66 | 200 | 101 | 1,035 | 15,543 | 26,897 | 42,440 |
| Additions | 0 | 0 | $\overline{0}$ | $\overline{0}$ | $\overline{0}$ | 312 | 312 | 0 | 312 | |
| Business combinations | 557 | 12,037 | 1,850 | $\Omega$ | $\Omega$ | $\circ$ | 396 | 14.841 | 20,797 | 35,638 |
| 31 December 2022 | 1,228 | 22,069 | 5,288 | 66 | 200 | 101 | 1,743 | 30,696 | 47,694 | 78,390 |
| Amortisation and impairment |
||||||||||
| 1 January 2022 | $-348$ | $-2,720$ | $-955$ | $-11$ | $-56$ | $-36$ | $-160$ | $-4,286$ | $\overline{O}$ | $-4,286$ |
| Amortisations | $-441$ | $-2,417$ | $-851$ | $-13$ | $-67$ | $-13$ | $-143$ | $-3,946$ | $\Omega$ | $-3,946$ |
| 31 December 2022 | $-788$ | $-5,137$ | $-1,806$ | $-24$ | $-122$ | -49 | $-304$ | $-8,231$ | $\mathbf{0}$ | $-8,231$ |
| Net book value | ||||||||||
| 1 January 2022 | 324 | 7,311 | 2,483 | 55 | 144 | 64 | 875 | 11,257 | 26,897 | 38,154 |
| 31 December 2022 | 440 | 16,932 | 3,482 | 42 | 78 | 52 | 1,440 | 22,465 | 47,694 | 70,159 |
| EUR thousand | Trademarks | Customer relationships |
Non-compete agreement |
Technology based intangibles |
Models and templates |
Capitalized development expenditure |
Other intangible assets |
Other intangible assets total |
Goodwill | Intangible assets total |
|---|---|---|---|---|---|---|---|---|---|---|
| Cost | ||||||||||
| 1 January 2021 | 414 | 8,472 | 2,577 | $\Omega$ | $\Omega$ | $\overline{O}$ | 895 | 12,359 | 23,311 | 35,670 |
| Additions | $\Omega$ | $\Omega$ | 0 | $\Omega$ | $\Omega$ | $\overline{0}$ | 150 | 150 | 0. | 150 |
| Business combinations | 258 | 1,559 | 861 | 66 | 200 | 101 | $\mathbf{O}$ | 3,045 | 3,586 | 6,630 |
| Reclassifications | $\Omega$ | 0 | $\Omega$ | $\Omega$ | 0 | $-10$ | $-10$ | $-10$ | ||
| 31 December 2021 | 672 | 10,031 | 3,438 | 66 | 200 | 101 | 1,035 | 15,543 | 26,897 | 42,440 |
| Amortisation and impairment |
||||||||||
| 1 January 2021 | $-69$ | $-1,360$ | $-406$ | $\Omega$ | $\Omega$ | 0 | $-17$ | $-1,853$ | 0 | $-1,853$ |
| Amortisations | $-279$ | $-1,360$ | $-549$ | $-11$ | $-56$ | $-36$ | $-143$ | $-2,290$ | 0 | $-2,290$ |
| 31 December 2021 | $-348$ | $-2,720$ | $-955$ | $-11$ | $-56$ | $-36$ | $-160$ | $-4,286$ | 0 | $-4,286$ |
| Net book value | ||||||||||
| 1 January 2021 | 345 | 7,112 | 2,171 | $\Omega$ | $\Omega$ | 0 | 878 | 10,506 | 23,311 | 33,817 |
| 31 December 2021 | 324 | 7,311 | 2,483 | 55 | 144 | 64 | 875 | 11,257 | 26,897 | 38,154 |
| EUR thousand | Machinery & Equipment | Other tangible assets | Total |
|---|---|---|---|
| Cost | |||
| 1 January 2022 | 997 | 480 | 1,477 |
| Additions | 167 | 188 | 355 |
| Business combinations | 202 | 12 | 214 |
| Disposals | $-39$ | $\Omega$ | $-39$ |
| 31 December 2022 | 1,328 | 680 | 2,007 |
| Depreciation and impairment | |||
| 1 January 2022 | $-815$ | $-235$ | $-1,049$ |
| Depreciations charge for the year | $-159$ | $-48$ | $-207$ |
| 31 December 2022 | $-974$ | $-283$ | $-1,256$ |
| Net book value | |||
| 1 January 2022 | 182 | 245 | 427 |
| 31 December 2022 | 354 | 397 | 751 |
| EUR thousand | Machinery & Equipment | Other tangible assets | Total |
|---|---|---|---|
| Cost | |||
| 1 January 2021 | 879 | 396 | 1,275 |
| Additions | 9 | 83 | 93 |
| Business combinations | 114 | $\overline{O}$ | 114 |
| Disposals | $-5$ | $\overline{0}$ | $-5$ |
| 31 December 2021 | 997 | 480 | 1,477 |
| Depreciation and impairment | |||
| 1 January 2021 | $-631$ | $-184$ | $-815$ |
| Depreciations charge for the year | $-184$ | $-51$ | $-235$ |
| 31 December 2021 | $-815$ | $-235$ | $-1,049$ |
| Net book value | |||
| 1 January 2021 | 248 | 212 | 461 |
| 31 December 2021 | 182 | 245 | 427 |
| EUR thousand | Right-of-use assets, buildings | Right-of-use assets, vehicles | Total |
|---|---|---|---|
| 1 January 2022 | 4,323 | 86 | 4,409 |
| Additions | 750 | 152 | 902 |
| Disposals | $-235$ | 0 | $-235$ |
| Business combinations | 342 | 92 | 434 |
| Depreciations for the financial year | $-1,815$ | $-132$ | $-1,947$ |
| 31 December 2022 | 3,365 | 198 | 3,564 |
| 1 January 2021 | 6,730 | 105 | 6,835 |
| Additions | 49 | 50 | 100 |
| Disposals | $-311$ | $-17$ | $-329$ |
| Depreciations for the financial year | $-2,145$ | $-52$ | $-2,197$ |
| 31 December 2021 | 4,323 | 86 | 4,409 |
On 3 January 2022, Gofore acquired 100% of the shares of Devecto Oy in exchange for a 70% cash consideration and 30% in shares. The privately owned company is based in Finland, and it is specialised in the software development and testing of intelligent devices and machinery. The acquired individual assets and liabilities have been recognized to the fair value of the time of the acquisition. As part of the fair value recognition, customer relationships, trademarks and non-competition agreements were recognised as intangible assets from the Devecto Ov acquisition as presented in the table below. The remaining goodwill, EUR 14.1 million, includes for example workforce, future customer relationships and buyer-specific synergy benefits such as cross-selling to Gofore's current customers.
Gofore Group has expensed acquisition-related transaction costs of EUR 551 thousand. Transaction costs are included in other operating expenses in the income statement.
Devecto's net assets have been recognised in fair value of the time of the acquisition, 3 January 2022. The accounting method of the acquisition has been modified after the preliminary purchase price allocation, based on new information on the facts and circumstances of the time of the acquisition. Fair value changes were made for the period in customer relationships, EUR 1.5 million, non-compete agreements, EUR 0.1 million, deferred tax liabilities, EUR 0.3 million, based on comparison to preliminary fair value adjustments at the time of the acquisition.
The discounted additional purchase price was adjusted by EUR 1.1 million related to new information of the time of the acquisition. Due to the fair value changes for the period made on the acquired opening balance, goodwill was decreased by EUR 0.3 million.
The table presents the fair values of the acquired assets and liabilities.
| EUR thousand | Devecto Oy (2022) |
|---|---|
| Purchase price | |
| Consideration paid in cash | 19,085 |
| Consideration paid in shares | 6,315 |
| Total purchase price | 25,400 |
| Fair value of assets and liabilities recognised on acquisitions | |
| Assets | |
| Intangible assets | |
| Customer relationships | 9,833 |
| Trademarks | 197 |
| Non-compete agreements | 1,298 |
| Intangible assets | 11,329 |
| Tangible assets | 64 |
| Right-of-use assets | 89 |
| Other assets | 2,852 |
| Cash and cash equivalents | 1,366 |
| Total assets | 15,699 |
| Liabilities | |
| Interest and non-interest bearing liabilities | 2,092 |
| Lease liabilities | 89 |
| Deferred tax liability | 2,266 |
| Total liabilities | 4,447 |
| Total identifiable net assets at fair value | 11,252 |
| Goodwill arising on acquisition | 14,148 |
| Purchase consideration transferred | 25,400 |
| Cash flow impact of acquisitions | |
| Consideration paid in cash | 19,085 |
| Cash and cash equivalents | $-1,366$ |
| Net cash flow on acquisition | 17,719 |
| Contingent consideration at the acquisition date | |
| EUR thousand | Devecto Oy (2022) |
| Contingent consideration liability at the acquisition date | 4,225 |
On 1 November 2022, Gofore acquired 100% of the shares of eMundo GmbH by paying 70 percent as cash consideration and 30 percent in shares. The privately owned company is based in Germany, and it designs and carries out digitalization projects and develops tailormade software for strategic operations such as cyber security, service processes, public transport and the automotive industry.
A contingent consideration has been agreed on, whereby Gofore pays a maximum of EUR 2.8 million in cash consideration, should the 2022-2024 growth and profitability targets (25% of annual net sales growth and profitability improvement) be met.
The Group has booked EUR 1.022 thousand in transaction costs related to the acquisition. The transaction costs are included in the Other operating expenses of the income statement.
The individual assets and liabilities acquired have been recognised in the preliminary acquisition cost calculation to their fair values of the time of the acquisition. As part of the fair value recognition, customer relationships, trademarks and non-competition agreements, as well as technology-based concepts were recognized as intangible assets from the eMundo Oy acquisition as presented in the table below.
The remaining goodwill, 6.6 million euros, includes for example workforce, future customer relationships and buyer-specific synergy benefits such as cross-selling to Gofore's customers.
eMundo GmbH (Austria) is a fully owned subsidiary of eMundo GmbH (Germany and it was included in the acquisition (the eMundo Group).
| EUR thousand | eMundo (2022), preliminary |
|---|---|
| Purchase price | |
| Consideration paid in cash | 7,883 |
| Consideration paid in shares | 2,400 |
| Total purchase price | 10,283 |
| Fair value of assets and liabilities recognised on acquisitions | |
| Assets | |
| Intangible assets | |
| Customer relationships | 2,204 |
| Trademarks | 360 |
| Non-compete agreements | 552 |
| Other intangible assets | 396 |
| Intangible assets | 3,512 |
| Tangible assets | 150 |
| Right-of-use assets | 345 |
| Deferred tax assets | 59 |
| Financial assets | 578 |
| Other assets | 1,577 |
| Cash and cash equivalents | 785 |
| Total assets | 7,007 |
| Liabilities | |
| Interest and non-interest bearing liabilities | 2,093 |
| Lease liabilities | 345 |
| Deferred tax liability | 935 |
| Total liabilities | 3,373 |
| Total identifiable net assets at fair value | 3,634 |
| Goodwill arising on acquisition | 6,649 |
| Purchase consideration transferred | 10,283 |
| Cash flow impact of acquisitions | |
| Consideration paid in cash | 7,883 |
| Cash and cash equivalents | $-785$ |
| Net cash flow on acquisition | 7,097 |
| Contingent consideration at the acquisition date | |
| EUR thousand | eMundo (2022), preliminary |
| Contingent consideration liability at the acquisition date | 2,219 |
Gofore Plc had unsecured loans of EUR 18.1 (10.1) million at the end of the review period. Gofore raised a new EUR 11.5 million unsecured loan during the period. The loans are associated with the conventional covenants tied to the equity ratio and interest-bearing net debt. The covenant conditions were met on 31 December 2022.
Gofore Plc has also a binding, unsecured revolving credit facility of EUR 5 million for the short-term general financing needs of the Group, such as corporate acquisitions. The credit facility remained undrawn throughout the review period.
The company has made interest rate cap and swap agreements to hedge its floating rate loans. At the reporting date 69% of floating rate loans were hedged, amounting EUR 12.3 million. The company applies cash flow hedge accounting to those agreements. Efficient share of fair value changes is recognized into OCI and presented in fair value reserves in equity. Interest rate cap agreements are valid until 2 March 2026 and 29 December 2028. The interest swap agreement is valid until 1 November 2027. On 31 December 2022, the fair value of cap agreements were EUR 673 thousand (EUR -1 thousand on 31 December 2021).
There were no sales, purchases, receivables or payables with related parties during the review period. The remuneration of the Board of Directors, Group CEO and members of the Group executive management team is published in the annual financial statements.
Gofore Plc holds an unsecured operative guarantee limit of EUR 1 million of which EUR 477 thousand was in use on 31 December 2022. The company has made a 10-year rental commitment to new business premises at the end of 2020. Estimated time for the new premises is at the end of 2023.
Gofore has given a negative pledge on its financial loans.
Gofore applies ESMA (European Securities and Markets Authority) guidelines on alternative performance measures effective from 2016.
Gofore uses and presents the following alternative performance measures to better illustrate the operative development of its business:
The items included in the EBITA and adjusted EBITA consist of the following:
| EUR thousand, unless otherwise specified | Q4/2022 | Q4/2021 | Change, % | H 2 /2022 | H 2 /2021 | Change, % | 2022 | 2021 | Change, % |
|---|---|---|---|---|---|---|---|---|---|
| EBITA, Adjusted EBITA and EBITDA | |||||||||
| EBIT | 5,533 | 4,402 | 26% | 8,367 | 6,522 | 28% | 16,637 | 12,197 | 36% |
| Amortisation of intangible assets identified in PPA | 969 | 586 | 65% | 1,898 | 1,171 | 62% | 3,789 | 2,254 | 68% |
| EBITA | 6,503 | 4,988 | 30% | 10,265 | 7,694 | 33% | 20,426 | 14,451 | 41% |
| Transaction costs from business combinations | 1,022 | $\overline{0}$ | 1,011 | $\overline{0}$ | 1,587 | 195 | |||
| Restructuring costs | $\overline{O}$ | 9 | $\overline{0}$ | 9 | COL | $\overline{O}$ | $-1$ | ||
| Gains or losses from sales of fixed assets | $-4$ | $\overline{0}$ | $-12$ | $\overline{0}$ | $-26$ | $\overline{0}$ | |||
| Adjusted EBITA | 7,521 | 4,997 | 51% | 11,265 | 7,703 | 46% | 21,987 | 14,646 | 50% |
| EBIT | 5,533 | 4,402 | 26% | 8,367 | 6,522 | 28% | 16,637 | 12,197 | 36% |
| Depreciations | 621 | 610 | 2% | 1,191 | 1,253 | -5% | 2,310 | 2,610 | $-12%$ |
| Amortisation of intangible assets identified in PPA | 969 | 586 | 65% | 1,898 | 1,171 | 62% | 3,789 | 2,254 | 68% |
| EBITDA | 7,124 | 5,598 | 27% | 11,456 | 8,947 | 28% | 22,736 | 17,062 | 33% |
| Key Figure | Definition |
|---|---|
| EBITDA | Operating profit + depreciations and amortization |
| EBITDA margin, % | Operating profit + depreciations and amortization divided by net sales and multiplied by a hundred |
| Operating profit before amortization of intangible assets identified in PPA and impairment of goodwill (EBITA) |
Operating profit + amortization of intangible assets identified in purchase price allocation (PPA) + impairment of goodwill |
| Operating profit before amortization of intangible assets identified in PPA and impairment of goodwill (EBITA) margin, $%$ |
Operating profit + amortization of intangible assets identified in purchase price allocation (PPA) + impairment of goodwill divided by net sales and multiplied by a hundred |
| Operating profit (EBIT) | Operating profit divided by net sales |
| Operating profit (EBIT) margin, % | Operating profit divided by net sales and multiplied by a hundred |
| Earnings per share (EPS), undiluted, euros | Profit for the period attributable to shareholders of the company divided by the weighted average number of shares outstanding during the financial period multiplied by a hundred |
| Earnings per share (EPS), diluted, euros | Profit for the period attributable to shareholders of the company divided by the weighted average number of shares outstanding during the financial period, adjusted for share issues, multiplied by a hundred |
$\blacksquare$
| Key Figure | Definition |
|---|---|
| Effective dividend yield, % | Dividend per share divided by the share price at the end of the financial period |
| P/E value | Share price at the end of the financial period divided by earnings per share, undiluted |
| Return on equity (ROE), % | Profit for the period (annualised) divided by average total equity, multiplied by a hundred |
| Return on investment (ROI), % | Profit before taxes (annualised) + financial expenses (annualised) divided by average total equity + average interest-bearing loans and borrowings, multiplied by a hundred |
| Equity ratio, % | Total equity divided by balance sheet total – advances received, multiplied by a hundred |
| Net gearing, % | Non-current interest-bearing liabilities + Non-current lease liabilities + Current interest-bearing liabilities + Current lease liabilities - Cash and cash equivalents - Other rights of ownership under Current and Non-current investments, divided by total equity and multiplied by a hundred |
G
| Key Figure | Definition |
|---|---|
| Full-time Equivalent, FTE | Overall capacity of the Group's personnel, converted into a value corresponding to the number of full- time employees. The figure includes the entire personnel, regardless of their role. The figure is not affected by annual leave, time-off in lieu of overtime, sick leave or other short-term absences. Part-time agreements and other long-term deviations from normal working hours reduce the amount of overall capacity in comparison with the total number of employees. The capacity of acquired companies' personnel has been considered as of the acquisition date. |
| Subcontracting, FTE | Subcontracting, FTE (Full Time Equivalent) figure shows the overall amount of subcontracting used in invoiced work, converted into a value corresponding to the number of full-time employees. Subcontracting used by acquired companies has been included as of the acquisition date. |
| Number of employees, at the end of the period | The number of employees at the end of the review period |
| Attrition rate | The number of ended employments divided by the number of staff at the end of the reporting period. Therefore, attrition rate numbers from time periods of different lengths are not comparable. |
| Adjusted EBITA | Reported EBITA + (+ goodwill impairment +/- costs/gains directly related to acquiring business combinations + restructuring costs of business structure - gains of sales of fixed assets + losses of sales of fixed assets) |
| Adjusted EBITA, % | Reported EBITA + (+ goodwill impairment +/- costs/gains directly related to acquiring business combinations + restructuring costs of business structure - gains of sales of fixed assets + losses of sales of fixed assets) divided by net sales and multiplied by a hundred |
| Organic net sales growth | Organic growth is defined by comparing the quarterly net sales in the Group income statement with the net sales of the previous reporting period's corresponding quarter. The growth is calculated with a comparable Group structure using the Group structure of the time of reporting to calculate pro forma net sales for the corresponding period. The pro forma net sales include the impact of acquisitions and divestments and is unaudited. |
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