Innofactor Plc — Earnings Release 2017

May 7, 2018

Innofactor publishes new financial figures for 2017 adjusted for the effects of the new IFRS 15 standard

Innofactor publishes new financial figures for 2017 adjusted for the effects of the new IFRS 15 standard

Innofactor Plc Stock Exchange Release May 7, 2018, at 08:30 Finnish time

Innofactor has implemented the IFRS 15 Revenue from Contracts with Customers standard starting from January 1, 2018, and will prepare its new financial reports in accordance with the new standard starting from the interim report for January–March 2018 that will be published on May 8, 2018.

The IFRS 15 standard affects the timing of the net sales from software licenses sold by Innofactor in cases where the software licenses are sold in connection with a project delivery. The effect of the IFRS 15 standard on the adjusted net sales and operating margin for 2017 is EUR -422 thousand (Q1/2017: -265, Q2/2017: -303, Q3/2017: +196, and Q4/2017: -50).

Innofactor's adjusted financial figures for 2017 will form the comparison data for the quarterly reports in 2018. The adjusted financial figures have not been audited.

Consolidated Profit and Loss Statement by Quarter, IFRS
EUR thousand	Adjusted Jan 1–Mar 31, 2017	Adjusted Apr 1–Jun 31, 2017	Adjusted Jul 1–Sep 31, 2017	Adjusted Oct 1–Dec 31, 2017	Change Jan 1–Dec 31, 2017	Published Jan 1–Dec 31, 2017
Net sales	17,252	17,149	14,126	17,139	-422	66,088
Growth of net sales	20.0%
Other operating income	103	19	16	-50		88
Materials (–)	-1,144	-2,005	-1,775	-1,317		-6,241
Employee benefits/expenses (–)	-12,270	-11,818	-10,276	-12,326		-46,690
Depreciation (–)	-676	-670	-667	-756		-2,769
Other operating expenses (–)	-3,043	-2,778	-2,772	-2,922		-11,515
Operating profit/loss	222	-103	-1,348	-232	-422	-1,039
Financial income	5	3	0	518		526
Financial expenses (–)	-146	-131	-73	-294		-644
Profit/loss before taxes	81	-231	-1,421	-8	-422	-1,157
Income taxes	-16	46	284	2	85	231
Profit/loss for the financial period	65	-185	-1,137	-6	-337	-926
Other comprehensive income
Items that may be later recognized
in profit or loss:
Exchange differences	-199	-116	-52	-377		-744
Total comprehensive income	-134	-301	-1,189	-383	-337	-1,670
Earnings per share calculated from the profit attributable to equity holders of the parent:
basic earnings per share (EUR)	0.0020	-0.0051	-0.0314	-0.0002		-0.0262
diluted earnings per share (EUR)	0.0020	-0.0051	-0.0314	-0.0002		-0.0262

Consolidated Balance Sheet, IFRS
ASSETS
						Change Jan 1–Dec 31, 2017
EUR thousand		Adjusted Mar 31, 2017	Adjusted Jun 30, 2017	Adjusted Sep 30, 2017	Adjusted Dec 31, 2017	Published Dec 31, 2017
Non-current assets
Tangible assets		664	742	686	640		640
Goodwill		27,673	27,542	27,615	26,398		26,398
Other intangible assets		8,875	8,679	8,295	7,797		7,797
Shares and holdings		62	62	62	62		62
Receivables		628	392	375	342		342
Deferred tax assets		5,765	5,655	5,653	5,668	85	5,583
Non-current assets		43,667	43,072	42,686	40,907	85	40,822
Current assets
Trade and other receivables		19,047	19,606	16,843	16,455	-422	16,877
Cash and cash equivalents		1,370	377	545	910		910
Current assets		20,417	19,983	17,388	17,365	-422	17,787
TOTAL ASSETS		64,084	63,055	60,074	58,272	-337	58,609
SHAREHOLDERS' EQUITY AND LIABILITIES
						Change Jan 1–Dec 31, 2017
EUR thousand		Adjusted Mar 31, 2017	Adjusted Jun 30, 2017	Adjusted Sep 30, 2017	Adjusted Dec 31, 2017	Published Dec 31, 2017
Equity attributable to the shareholders of the parent company
Share capital		2,100	2,100	2,100	2,100		2,100
Share premium reserve		72	72	72	72		72
Other reserves (+/–)		59	59	59	59		59
Fund for invested unrestricted equity	20,262	20,262	20,262	20,321		20,321
Retained earnings		4,144	4,055	3,108	2,212	-337	2,549
Total shareholders' equity		26,637	26,548	25,601	24,764	-337	25,101
Non-current liabilities
Loans from financial institutions		7,983	6,830	6,436	7,280		7,280
Deferred tax liabilities		2,214	2,112	2,009	1,826		1,826
Long term liabilities total		10,197	8,942	8,445	9,106		9,106
Current liabilities
Loans from financial institutions		7,584	6,654	8,377	6,948		6,948
Trade and other payables		19,666	20,911	17,651	17,454		17,454
Current liabilities total		27,250	17,565	26,028	24,402		24,402
Total liabilities		37,447	36,507	34,473	33,508		33,508
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES		64,084	63,055	60,074	58,272	-337	58,609

Consolidated Cash Flow Statement, IFRS
EUR thousand		Adjusted Jan 1–Dec 31, 2017	Published Jan 1–Dec 31, 2017				Change Jan 1–Dec 31, 2017
Cash flow from operating activities
Operating profit		-1,461	-1,039				422
Adjustments:
Depreciation		2,769	2,769
Non-cash transactions		485	485
Changes in working capital:
Change in trade or other receivables (+/–)		2,346	1,924				-422
Change in trade and other payables (+/–)		633	633
Interests paid (–)		-643	-643
Interests received		40	40
Total cash flow from operating activities		4,169	4,169				0

The estimate of the effect of the IFRS 15 standard to the net sales and operating margin in 2018 has been updated, and it is estimated to be approximately EUR 0.4–0.6 million (previous estimate EUR 0.5–1.0 million), which would be transferred in its entirety to 2019. Applying the IFRS 15 standard has no effect on Innofactor's long term financial goals.

Additional information on applying the IFRS 15 standard and its effects on Innofactor can be found in the Finnish Annual Report 2017, pages 56–57. The English version of the Annual Report will be published during May at https://www.innofactor.com/invest-in-us/releases-publications-and-reports/.

Espoo, May 7, 2018

INNOFACTOR PLC

Sami Ensio, CEO

Additional information:

Marko Lehtonen, CFO

Innofactor Plc

Tel: +358 50 575 2006

marko.lehtonen@innofactor.com

Distribution:

NASDAQ Helsinki

Main media

www.innofactor.com

Innofactor

Innofactor is a leading Nordic provider of digitalization and cloud solutions. Innofactor has Microsoft Ecosystem’s leading expertise and the most comprehensive offering in the Nordics. Innofactor has over 600 eager and motivated top professionals in Finland, Sweden, Denmark and Norway. Innofactor serves over 1,500 commercial, public, and third sector organizations. In 2013 to 2017, the annual growth of Innofactor’s net sales has been approximately over 20%. The Innofactor Plc share is listed in the technology section of the main list of NASDAQ Helsinki Ltd. www.innofactor.com