Innofactor Plc — Interim / Quarterly Report 2011

May 10, 2011

Innofactor Plc's interim report for January 1-March 31, 2011 (IFRS)

Innofactor Plc's interim report for January 1-March 31, 2011 (IFRS)

Innofactor Plc Stock Exchange Release May 10, 2011, at 8:30 Finnish time

Summary

Innofactor group's key figures for January 1-March 31, 2011:

-- Net sales EUR 3,943 thousand (2010: 2,210), increase of 78.4%
-- Earnings before interest, taxes, depreciation and amortization (EBITDA) EUR
150 thousand (2010: 348), decrease of 56.9%
-- EBITDA percentage 3.8% (2010: 15.7%)
-- Earnings before interest and taxes (EBIT) EUR 19 thousand (2010: 279)
-- EBIT percentage 0.5% (2010: 12.6%)

Innofactor's result for the first quarter was affected by one-off costs related
to the relisting, a sum of about EUR 200 thousand in the review period.

The future outlook of Innofactor has not changed. The group's net sales in 2011
is estimated to be about EUR 17 million, which is an increase of 70% compared
to 2010. Additionally, the earnings before interest, taxes, depreciation and
amortization (EBITDA) both in euro and in percentage is estimated to be better
than in 2010 (2010: EUR 979 thousand and 9.9 percent).

Key figures of the group

The figures in the interim report have not been audited.

                               mo. 1-3      mo. 1-3      Change  mo. 1-12   
                                /2011        /2010                /2010

---

Net sales, EUR thousand 3,943 2,210 +78.4% 9,862

Earnings before interest, taxes, 150 348 -56.9% 979
depreciation and amortization
(EBITDA) , EUR thousand*
percentage of net sales* 3.8% 15.7% 9.9%
Earnings before interest and 19 279 -93.2% 702
taxes (EBIT), EUR thousand*
percentage of net sales* 0.5% 12.6% 7.1%
Earnings before taxes, EUR 16 278 -94.2% 696
thousand
percentage of net sales 0.4% 12.6% 7.1%
Earnings, EUR thousand 13 202 -93.6% 505
percentage of net sales 0.3% 9.1%
Equity, EUR thousand 12,291 2,799 +339.1 12,278
%
Return on equity** 0.4% 29.9% 6.8%
Return on investment** 0.7% 41.4% 9.7%
Net gearing -9.9% -59.7% -14.0%
Equity ratio 74.8% 55.7% 68.6%
Balance sheet total, EUR thousand 18,241 5,446 +234.9 19,517
%
Research and development, EUR 592 1,173
thousand***
percentage of net sales*** 15.0% 11.9%
Personnel on average during the 174 87 +100.0 108
review period %
Personnel at the end of the 177 96 +84.4% 171
review period
Number of shares at the end of 585,236,987 335,133,294 +74.6% 585,236.987
the review period****
Earnings per share (EUR)**** 0.000022 0.000603 -96.3% 0.0014
Shareholders' equity per share 0.021 0.008 +151.5 0.021
(EUR)**** %
Number of shares on May 10, 29,261,800
2011****
Earnings per share for the number 0.000444
of shares on May 10, 2011
(EUR)****
Shareholders' equity per share 0.420
for the number of shares on May
10, 2011 (EUR)****

---

* The figures include one-off costs related to the relisting for about EUR 200
thousand.

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

*** There are no comparison data for the corresponding review period in 2010 as
Innofactor did not draft comparable interim reports in 2010 due to the reverse
acquisition in accordance with IFRS 3.

**** 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) and due to this, the
total number of shares decreased to 1/20 of the previous number.

Reporting

Innofactor Plc operates on one segment, offering software and systems and
services related to them, and it operates mainly in Finland. Due to this, a
segment-specific or geographical distribution of the net sales and result will
not be presented.

CEO Sami Ensio's review:

On the first quarter of the year, Innofactor's net sales grew 78.4 percent
compared to the same period last year. Large part of the growth was based on
the acquisitions in 2010 and about 14 percent of the growth was organic. The
predicted growth for the whole year is about 70 percent.

Research and development focused into new versions of old products and into
Innofactor's first cloud solutions. Research and development costs recognized
in the profit and loss statement were EUR 592 thousand (there is no comparison
figure available for the same period in 2010).

During the first quarter of the year, the relisting of Innofactor Plc was
completed. That resulted in about EUR 200 thousand of one-off costs and
required a significant amount of attention from the upper management. The
earnings before interest, taxes, depreciation and amortization (EBITDA) for the
first quarter was EUR 150 thousand (3.8%) and the earnings before interest and
taxes (EBIT) was EUR 19 thousand (0.5%).

On the second quarter of 2011, Innofactor will focus on improving
profitability, which will be helped by the good order backlog. During the
quarter, the consolidation of Innofactor Documenta Oy and the companies of the
Innofactor Software subgroup will be completed. In this arrangement, the
operative business of the Innofactor group was centralized into the former
Innofactor Documenta Oy (from now on, Innofactor Software Oy) as of May 1,
2011. This arrangement will decrease management costs in the future.
Additionally, special attention will be paid to unifying and improving the
methods of project management and resource allocation. There will also be
attempts to decrease other business costs. These actions have been named as the
cost-effectiveness program. We believe that the cost-effectiveness program can
be implemented without a need to decrease the number of personnel.

Market outlook and business environment

Nokia and Microsoft made an announcement on significant cooperation on February
11, 2011. Nokia's move to start using the Microsoft operating system in its
smart phones may offer Innofactor, Finland's largest software provider focused
on Microsoft solutions, significant opportunities, which may have a fundamental
effect on the growth of the group within the coming years.

Nokia's announcement on April 27, 2011, that it will transfer the Symbian
development to an external service provider, will affect the business
environment in Finland. This will bring some uncertainty factors to the
business environment, but they are not predicted to cause significant risk for
Innofactor's operation.

Innofactor will publish its new global cloud solutions in Microsoft's Worldwide
Partner Conference in Los Angeles, USA, on July 10-14, 2011. The conference is
Microsoft's largest partner event and over 10,000 Microsoft partners all over
the world will attend. Possible product launches by Innofactor and other
companies and their reception in the World Wide Conference will affect
Innofactor's position as a global provider of Microsoft cloud solutions.

Cloud solutions combined with the Windows operating system becoming more common
in mobile phones may offer Innofactor, Finland's largest software provider
focused on Microsoft solutions, significant opportunities.

On the whole, Innofactor considers the market outlook to be positive.

Also, when considering the business environment, it should be noted that
Innofactor has worked actively in Sweden to make itself better known among
Microsoft Sweden and its local partners.

New publishing procedure

In accordance with the recommendation of the standard 5.2b of the Financial
Supervisory Authority, Innofactor will introduce a new procedure for publishing
the interim reports. This release is used for publishing the interim report of
the first quarter of 2011, which is enclosed as a PDF file and can also be read
on Innofactor's web site at www.innofactor.com.

Espoo, May 10, 2011

INNOFACTOR PLC

Board of Directors

Additional information:

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

Distribution:

NASDAQ OMX Helsinki
Main media
www.innofactor.com

Financial releases in 2011

The interim reports of Innofactor Plc in 2011 will be published as follows:

-- Interim report January-June on August 9, 2011, at 8:30 Finnish time
-- Interim report January-September on November 1, 2011, at 8:30 Finnish time

The minutes of meeting for the Annual General Meeting on April 28, 2011, were
published on May 5, 2011.

Attachments: