Innofactor Plc — Annual Report 2012

Feb 26, 2013

Innofactor Plc financial statement 2012 (IFRS)

Innofactor Plc financial statement 2012 (IFRS)

Innofactor Plc Stock Exchange Release February 26, 2013, at 8:30 Finnish time

Summary

Innofactor group's key figures for October 1-December 31, 2012:

-- Net sales EUR 6,297 thousand (2011: 5,136), increase of 22.6%
-- Operating profit before depreciation and amortization (EBITDA), EUR 1,035
thousand (2011: 606), increase of 70.8%
-- EBITDA percentage 16.4% (2011: 11.8%)
-- Operating profit (EBIT) EUR 869 thousand (2011: 463), increase of 87.7%
-- EBIT percentage 13.8% (2011: 9.0%)

Innofactor group's key figures for January 1-December 31, 2012:

-- Net sales EUR 18,818* thousand (2011: 17,205), increase of 9.4%*
-- Operating profit before depreciation and amortization (EBITDA), EUR 1,215**
thousand (2011: 1,443), decrease of 15.8%**
-- EBITDA percentage 6.5%** (2011: 8.4%)
-- Operating profit (EBIT) EUR 620** thousand (2011: 904), decrease of 31.4%**
-- EBIT percentage 3.3%** (2011: 5.3%)

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

The financial statement figures in this financial statement have been audited.
The acquired Danish company Bridgeconsulting A/S (current Innofactor A/S) has
been included in the figures as of July 1, 2012. Further details about the
acquisition can be found in this interim report's section "Acquisitions and
changes in the group structure."

* Due to the organizational change on January 2, 2012, projects were
rearranged, which had a one-off effect of lowering the net sales in January by
about EUR 300 thousand.

** Due to the organizational change on January 2, 2012, projects were
rearranged, which had a one-off effect of lowering the net sales in January by
about EUR 300 thousand. Additionally, the personnel and office space
arrangements related to the organizational change led to a one-off cost of
about EUR 100 thousand. In total, these reduced the net sales by about EUR 400
thousand. Additionally, the acquisition made on July 5, 2012, resulted in a
one-off cost of about EUR 150 thousand in the review period July 1-September
30, 2012.

Key figures of the group, IFRS

              mo. 10-12   mo. 10-12   Change  mo. 1-12 /2012  mo.     Change
               /2012       /2011                               1-12         
                                                               /2011

--------------------------------------------------------------------------------

Net sales, EUR 6,297 5,136 +22.6% 18,818 17,205 +9.4%
thousand*
Operating profit 1,035 606 +70.8% 1,215 1,443 -15.8%
before
depreciation
and
amortization
(EBITDA), EUR
thousand**
percentage of 16.4% 11.8% 6.5% 8.4%
net sales**
Operating 869 463 +87.7% 620 904 -31.4%
profit/loss
(EBIT), EUR
thousand**
percentage of 13.8% 9.0% 3.3% 5.3%
net sales**
Earnings before 860 457 88.2% 591 886 -33.3%
taxes, EUR
thousand**
percentage of 13.7% 8.9% 3.1% 5.1%
net sales**
Earnings, EUR 816 361 +126.0 449 687 -34.6%
thousand** %
percentage of 13.0% 7.0% 2.4% 4.0%
net sales**
Shareholders' 13,760 12,905 +6.6% 13,760 12,905 +6.6%
equity, EUR
thousand
Return on 6.1% 2.8% 3.4% 5.5%
equity***
Return on 5.9% 3.7% 4.5% 7.2%
investment***
Net gearing 5.4% -5.4% 5.4% -5.4%
Equity ratio 66.1% 74.5% 66.1% 74.5%
Balance sheet 22,173 18,324 +21.0% 22,173 18,324 +21.0%
total, EUR
thousand
Research and 548 369 +48.5% 2,488 2,086 +19.3%
development,
EUR thousand
percentage of 8.7% 7.2% 13.2% 12.1%
net sales
Personnel on 197 184 +7.1% 189 177 +6.8%
average during
the review
period
Personnel at the 193 189 +2.1% 193 189 +2.1%
end of the
review period
Number of shares 30,165,900 29,261,800 +3.1% 30,165,900 29,261,800 +3.1%
at the end of
the review
period****
Earnings per 0.0272 0.0123 +121.1 0.0150 0.0235 -36.2%
share (EUR)**** %
Shareholders' 0.460 0.441 +4.3% 0.460 0.441 +4.3%
equity per
share (EUR)****

---

* Due to the organizational change on January 2, 2012, projects were
rearranged, which had a one-off effect of lowering the net sales in January by
about EUR 300 thousand.

** Due to the organizational change on January 2, 2012, projects were
rearranged, which had a one-off effect of lowering the net sales in January by
about EUR 300 thousand. Additionally, the personnel and office space
arrangements related to the organizational change led to a one-off cost of
about EUR 100 thousand. In total, these reduced the net sales by about EUR 400
thousand. Additionally, the acquisition made on July 5, 2012, resulted in a
one-off cost of about EUR 150 thousand in the review period July 1-September
30, 2012.

*** The percentages for the return on equity and return on investment have been
adjusted to correspond with the figures for a 12-month period.

**** In accordance with the decision of the Innofactor Plc's Annual General
Meeting on April 28, 2011, twenty old shares were consolidated into one new
share (registered in the Trade Register on May 7, 2011), which reduced the
total number of shares to 1/20 of the previous number. The key figures
presented in the table have been adjusted to correspond with the current number
of shares.

Reporting

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

CEO Sami Ensio's review

Innofactor's net sales on October 1-December 31, 2012, were EUR 6,297 thousand,
which shows an increase of 22.6 percent compared to the same period in the
previous year. Operating profit before depreciation and amortization (EBITDA)
during October 1-December 31, 2012, was EUR 1,035 thousand (16.4%) and earnings
before interest and taxes (EBIT) were EUR 869 thousand (13.8%).

For the entire year 2012, the net sales were EUR 18,818 thousand, which shows
an increase of 9.4 percent compared to the same period in the previous year.
Operating profit before depreciation and amortization (EBITDA) in 2012 was EUR
1,215 thousand (6.5%) and earnings before interest and taxes (EBIT) were EUR
620 thousand (3.3%).

Integrating the Danish business intelligence company Bridgeconsulting A/S
(current Innofactor A/S), which was acquired in summer 2012, as part of
Innofactor has gone as planned and on the last quarter, the company managed to
exceed the goals set for it. Also the personnel satisfaction in the company has
remained on a very high level. Microsoft Denmark selected Innofactor A/S as the
Business Intelligence partner of the year in Denmark. Innofactor A/S provides a
good basis for expanding business in Denmark.

Innofactor's business in 2013 has started as expected and Innofactor sees the
growth in Microsoft-based software market and its own outlook as positive in
2013.

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

Market outlook and business environment

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

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

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

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

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

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

As the companies committing strongly to Microsoft are typically small,
Innofactor believes that they are likely to be consolidating into larger units,
and this will offer Innofactor expansion opportunities.

Future outlook

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

Board of Directors' proposal on the dividend

Innofactor is a growing company and intends to use its operating profit on
actions promoting growth, for example, on realizing mergers. Innofactor has
defined a dividend distribution policy according to which the aim of the Board
of Directors is to provide an opportunity for the shareholders to distribute,
from the part of the operating profit before depreciation and amortization
(EBITDA) that exceeds 10 percent, the maximum dividend allowed by the state of
the business. For 2012, the EBITDA was under 10 percent. In making the proposal
on the dividend, the Board of Directors takes into account the company's
financial situation, profitability and near-term outlook.

At the end of the financial period of 2012, the distributable assets of the
group's parent company were EUR 28,312,743.79.

The Board of Directors proposes that Innofactor Plc should not pay any dividend
for the financial period of 2012.

Espoo, February 26, 2013

INNOFACTOR PLC

Board of Directors

Additional information:

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

Briefings concerning the financial statement of 2012

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

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

Innofactor will also hold a conference call in English for analysts, media and
investors on February 26, 2013, at 17:00 Finnish time. Registrations to
ir@innofactor.com at least one hour before the event.

Financial releases in 2013

The schedule for financial releases in 2013 is as follows:

March 5, 2013: The annual report, including the financial statement and annual
report, will be published on the company's web site at
www.innofactor.com/investors

March 26, 2013, at 10:00 Finnish time: Annual General Meeting

April 16-April 29, 2013: Silent period

April 30, 2013, at 8:30 Finnish time: Interim report for January-March

July 16-July 29, 2013: Silent period

July 30, 2013, at 8:30 Finnish time: Interim report for January-June

October 15-October 28, 2013: Silent period

October 29, 2013, at 8:30 Finnish time: Interim report for January-September

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

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