Solteq Oyj — Earnings Release 2020

Feb 25, 2021

Solteq Plc’s Financial Statements Bulletin January 1 – December 31, 2020

Solteq Plc’s Financial Statements Bulletin January 1 – December 31, 2020

Solteq Plc Stock Exchange Bulletin February 25, 2021 at 8.00 am
Company performed very well in a changed market situation

October–December

· Comparable revenue totaled EUR 16,408 thousand (15,009) and revenue EUR
16,408 thousand (15,708).
· Comparable EBITDA was EUR 3,320 thousand (1,927) and EBITDA EUR 3,080
thousand (4,387).
· Comparable operating profit was EUR 2,027 thousand (867) and operating
profit EUR 1,787 thousand (3,328).
· Earnings per share was EUR 0.03 (0.11).
· The comparable revenue was 9.3 percent higher than in the comparison period,
while revenue grew by 4.5 percent.

January–December

· Comparable revenue totaled EUR 60,452 thousand (55,293) and revenue EUR
60,452 thousand (58,291).
· Comparable EBITDA was EUR 10,810 thousand (6,582) and EBITDA EUR 10,380
thousand (9,714).
· Comparable operating profit was EUR 5,780 thousand (2,579) and operating
profit was EUR 5,350 thousand (5,711).
· Earnings per share was EUR 0.10 (0.15).
· Solteq Group’s equity ratio was 35.5 percent (32.0).
· Net cash flow from operating activities was EUR 6,302 thousand (4,128).
· The comparable revenue was 9.3 percent higher than in the comparison period,
while revenue grew by 3.7 percent.
· The company will continue to invest in future growth by focusing on the
development of its own cloud-based software products and services. As
development investments are commercialized, the company’s annual product
development investments account for 10–15 percent of the Software segment’s
revenue. During the financial year, product development investments amounted to
EUR 3.0 million (3.9). Investments to product development during 2021 are
expected to be approximately EUR 2.5 million.
· Solteq Group’s revenue is expected to grow clearly and operating profit to
improve.
· The Board of Directors proposes a dividend of EUR 0.15.

Key figures

                     10       10  Change %  1-12/2020  1-12/2019  Change %
                -12/202  -12/201
                      0        9

Revenue, TEUR 16,408 15,708 4.5 60,452 58,291 3.7
Comparable 16,408 15,009 9.3 60,452 55,293 9.3
revenue, TEUR
EBITDA, TEUR 3,080 4,387 -29.8 10,380 9,714 6.9
Comparable EBITDA, 3,320 1,927 72.3 10,810 6,582 64.2
TEUR
Operating profit, 1,787 3,328 -46.3 5,350 5,711 -6.3
TEUR
Comparable 2,027 867 133.7 5,780 2,579 124.1
operating profit,
TEUR
Profit for the 622 2,049 -69.6 1,980 2,803 -29.4
financial period,
TEUR
Earnings per 0.03 0.11 -69.6 0.10 0.15 -29.4
share, EUR
Operating profit, 10.9 21.2   8.9 9.8
%
Comparable 12.4 5.8   9.6 4.7
operating profit,
%
Equity ratio, %       35.5 32.0

CEO Olli Väätäinen: Company performed very well in a changed market situation

Solteq Group’s comparable revenue grew clearly and the improvement in profit was
significant. Solteq Group’s comparable revenue was EUR 60.5 million – when the
absence of the SAP ERP business is taken into account – up by 9.3 percent. The
Group’s comparable operating profit was EUR 5.8 million, up by 124.1 percent
year-on-year. The comparable operating profit margin was 9.6 percent. The
company’s comparable EBITDA increased by 64.2 percent year-on-year to EUR 10.8
million. Solteq Group’s comparable EBITDA margin was 17.9 percent.

Effective from the beginning of the year, the new segmentation restructured the
company into two business segments: Solteq Software (software business) and
Solteq Digital (services business). The Software segment accounted for about a
third and the Digital segment about two thirds of the Group’s revenue. Both
segments performed well, as expected. Revenue from international subsidiaries
accounted for 20.6 percent of consolidated revenue, which – due to the COVID-19
pandemic – was slightly below expectations.

Solteq Software business grew during the financial year. The segment’s long-term
financial goal is to grow by at least 20 percent a year. Success was driven by
Utilities business area with its order intake of EUR 22 million. Solteq Digital
performed consistently well, thanks to the customer orders secured prior to the
pandemic. Investments in the company’s product development amounted to around
EUR 3 million.

The company monitored and assessed the impact of the COVID-19 pandemic on its
business throughout the year. The pandemic had only minor negative impact in
Finland, mainly affecting customer projects in the travel, service, and leisure
sectors. The organization’s operational capacity and the safety of its
stakeholders were ensured by measures adopted in the early stages of the
pandemic.

The company issued a new bond on October 1, 2020, using the assets obtained to
redeem a bond that would have matured on July 1, 2021. A new, fixed-rate and
unsecured senior bond worth EUR 23.0 million was admitted to public trading on
Nasdaq Helsinki Ltd on October 5, 2020. The company used the new bond to secure
its long-term financing and going concern.

Solteq Group’s business outlook is good both in Finland and internationally.
Driven by the Utilities business, Solteq Software is expected to continue its
upward growth trend. The business outlook for Solteq Digital is expected to
remain stable despite the pandemic. The digital reality is affecting everyone.
Keeping up with the latest developments is therefore on the current and future
agendas of companies of different sizes and in various sectors.

Profit guidance 2021

Solteq Group’s revenue is expected to grow clearly and operating profit to
improve.

Attachments
Solteq Plc Financial Statements Bulletin January 1 – December 31, 2020

Further information
CEO Olli Väätäinen
Tel: +358 50 557 8111
E-mail: olli.vaatainen@solteq.com

CFO Kari Lehtosalo
Tel: +358 40 701 0338
E-mail: kari.lehtosalo@solteq.com

Distribution

NASDAQ OMX Helsinki
Key media
www.solteq.com (https://investors.solteq.com/)
About Solteq

Solteq is a Nordic provider of IT services and software solutions
specializing in the digitalization of business and industry-specific software.
The key sectors in which the company has long term experience include retail,
industry, energy and services. The company operates in Finland, Sweden, Norway,
Denmark, Poland and the UK and employs 600 professionals.

Attachments: