GOFORE PLC HALF-YEAR REPORT 13 AUGUST 2021 AT 9:00 EET
Gofore Plc�s Half-Year Report 1 January 30 June 2021
Profitable growth continued
January June 2021 in brief
On 18 February 2021, Gofore announced the acquisition of 95 per cent of the share capital of CCEA Oy, a change execution consulting specialist. The acquisition was completed on 1 March 2021.
On 23 March 2021, Gofore Plc transferred from the Nasdaq First North Growth Market Finland marketplace to the official list of Nasdaq Helsinki Ltd.
On 22 April 2021, Gofore announced that it had carried out a directed share issue of 1,000,000 new shares and raised EUR 19 million as a result.
April June 2021 in brief
Unless otherwise specified, all figures presented in this half-year report in brackets refer to the corresponding period the previous year. The information in the half-year report is unaudited. Information concerning the full year 2020 is based on the audited financial statements for 2020.
1The company uses adjusted EBITA as a measure for operative profitability. Adjusted EBITA is defined in the calculation formulas of key figures in the tables section. Reconciliation calculations are presented at the end of the section.
Financial guidance for 2021
The company reiterates the financial guidance announced on 5 March 2021. Gofore estimates that the net sales for the financial year of 2021 will increase compared to the 2020 financial year and the adjusted EBITA for the 2021 financial year will increase compared to the 2020 financial year.
Gofore reports and comments on the development of its net sales in its monthly Business Reviews.
Long-term financial targets (announced on 16 December 2020)
Gofore aims for annual net sales growth exceeding 20 per cent, of which organic growth accounts for approximately half. In terms of profitability, Gofores target is an adjusted EBITA margin of 15%
Key figures
| EUR thousand, unless otherwise specified | 1 Jan 30 June 20211 | 1 Jan 30 June 2020 | 1 Jan 31 Dec 20202 |
| Revenue (net sales) | 51,679 | 37,376 | 77,953 |
| Growth of revenue (net sales), % | 38.3% | 11.7% | 21.7% |
| EBITDA | 8,115 | 6,102 | 12,329 |
| EBITDA margin-% | 15.7% | 16.3% | 15.8% |
| EBITA, adjusted | 6,943 | 5,629 | 10,778 |
| EBITA, adjusted, margin-% | 13.4% | 15.1% | 13.8% |
| EBITA | 6,758 | 4,911 | 9,908 |
| EBITA margin-% | 13.1% | 13.1% | 12.7% |
| Operating profit (EBIT) | 5,675 | 4,495 | 8,750 |
| Operating profit (EBIT) margin-% | 11.0% | 12.0% | 11.2% |
| Profit for the period | 3,944 | 3,234 | 6,903 |
| Earnings per share, EPS (diluted), EUR | 0.27 | 0.23 | 0.49 |
| Return on equity (ROE), % | 17.2% | 19.9% | 20.2% |
| Return on investment (ROI), % | 18.2% | 20.6% | 18.1% |
| Equity ratio, % | 56.8% | 56.9% | 47.0% |
| Net gearing, % | -30.8% | -29.5% | -15.4% |
| Average overall capacity, FTE | 726 | 558 | 597 |
| Average subcontracting, FTE | 111 | 71 | 83 |
| Number of employees at the end of the period | 803 | 610 | 724 |
1 CCEA Oys figures have been consolidated into those of the Gofore Group since 1 March 2021.
2 Qentinel Finland Oy figures have been consolidated into those of the Gofore Group since 1 September 2020.
Quarterly development
| Group | Q1/20211 | Q2/2021 | Q3/2021 | Q4/2021 |
| Net sales, MEUR? | 25.2 | 26.4 | ||
| EBITA, MEUR, adjusted | 3.5 | 3.4 | ||
| EBITA-%, adjusted | 13.9% | 13.0% | ||
| Group | Q1/2020 | Q2/2020 | Q3/20202 | Q4/2020 |
| Net sales, MEUR | 18.8 | 18.6 | 16.3 | 24.3 |
| EBITA, MEUR, adjusted? | 3.2 | 2.5 | 1.9 | 3.3 |
| EBITA-%, adjusted | 16.8% | 13.3% | 11.5% | 13.5% |
| Growth-% | Q1/2021 | Q2/2021 | Q3/2021 | Q4/2021 |
| Net sales, growth-%? | 34.1% | 42.5% | ||
| EBITA, adjusted, growth-%? | 10.7% | 39.5% |
1 CCEA Oys figures have been consolidated into those of the Gofore Group since 1 March 2021.
2 Qentinel Finland Oy figures have been consolidated into those of the Gofore Group since 1 September 2020.
CEO Mikael Nylund comments on January June 2021:
Our first half of the year began and ended stronger than ever before.
In the first half of the year, our net sales increased by 38 per cent year-on-year. We are already in the middle of the 16th consecutive financial year of uninterrupted profitable growth. Customer projects in the first half of the year were carried out as planned, and demand in different business areas developed favourably. The past half-year period reinforced our view that the society and companies have accelerated their investments in the development of digital business and services.
Supported by growth, also our profitability improved commendably. The adjusted EBITA for January June increased to EUR 6.9 million, corresponding to 13.4 per cent of net sales. Towards the end of the first half of the year, our billing rate improved from the lower level in March and April, when the billing rate was particularly affected by the transition between agreement periods with one of our largest customers (KEHA Centre). As the year progressed, we, and the industry in general, witnessed an increase in personnel turnover, as the coronavirus period receded. The increase in personnel turnover naturally affects both growth and profitability.
In Finland, our growth was strong in both the private and public sector customer business. We were particularly successful in public sector tenders, and our net sales to these customers increased by approximately 20 per cent, to EUR 33.3 million. We are delighted that our private sector sales increased substantially, by almost 92 per cent, to EUR 18.4 million, supported by corporate acquisitions. We have developed our offering with a long-term view and have achieved an increasingly strategic role as a partner in the digital transformation of companies. Indeed, the portion of the private sector in our net sales grew to 36 per cent, from 26 per cent a year earlier.
Regarding public sector customers, the business proceeded as planned and we renewed significant agreements with the Tax Administration and the City of Espoo in Finland, among others. Looking ahead, we estimate that the reform of the social and health care services in Finland, along with the investments made by the EU’s recovery tool in sustainable green growth and digitalisation, will increase service demand in the future, especially in the field of IT environment-related planning, project management, procurement expertise and people-driven change management. In projects that have a societal impact, we will be able to utilise technology to reform thinking and operating models and develop more sustainable solutions. This is how we carry out our mission to change the world for the better.
Our international business grew by 10 per cent year-on-year to EUR 4.5 million. In Germany, which is an important target market for us, the coronavirus pandemic has decelerated our new customer acquisition somewhat, but we expect the recovery in the economy and activity to have a positive effect towards the end of the year. Our strategic goal is to grow internationally. In local competition, we are building on our Nordic head start in the successful digitalisation of the public sector and as a specialist in an agile people-driven development and operating model, which is rapidly gaining ground in other markets, as well.
Successful corporate acquisitions form a key part of our growth strategy. In February, we announced our latest acquisition, with CCEA joining our family. CCEA’s team of approximately 50 experts enhanced our ability to combine technological and people-driven transformation management and strengthened our expertise in helping customers succeed even in the most demanding of transformation projects. Qentinel Finland’s digital testing and quality assurance services acquired last autumn have also been successfully integrated, and our customers have been able to enjoy our increasingly strong and extensive support in implementing their digital transformation.
A satisfied customer is an important source of growth and joy for us. In the latest customer satisfaction survey, the Net Promoter Score was 61 in Finland (scale -100 / +100). This is a very good result and higher than in the measurements taken last year. Our customers especially value our expertise, customer orientation and flexibility in our cooperation.
As part of our growth strategy, we also strengthened the conditions for growth in the capital markets. In March, we made the transition to the Nasdaq Helsinki Main Market. The transition has increased our visibility and awareness and has elevated us to a new reference group in Finland and internationally in the eyes of customers, partners and investors alike. In April, we executed a share issue to international and Finnish institutional investors, which resulted in us raising EUR 19 million to support the implementation of our growth strategy. For its part, the share issue also expanded our ownership base, with international investors subscribing for more than 75 per cent of the shares on offer. Alongside the directed share issue the four companys founders sold a portion of their shareholdings.
Our growth strategy that was updated at the end of last year is spot-on in a world recovering after the coronavirus pandemic and seeking new solutions to global sustainability challenges. We aim to outpace the growth of the IT services market. The growth avenues are: growth in Finland, growth in international markets and growth through mergers and acquisitions. We are well on our way towards our vision of becoming one of the major digital transformation consultancies in Europe.
IT market outlook and operating environment
The coronavirus pandemic has accelerated the digitalisation of the public and private sectors and the related investments. Across the board, these investments are still evolving from the implementation of individual digital services towards organisation-wide digital transformation and the development of digital capabilities. The company expects this development to continue and be reflected in the short and long-term demand. However, it is also worth noting that customers’ ability and willingness to invest in digital transformation continues to depend on economic development in both the public and private sectors.
The company still expects digitalisation investments in the Finnish public sector to continue to grow as they did earlier. The inherently long-term nature of public sector IT investments and long-term cooperation agreements with suppliers render demand relatively predictable. The forthcoming structural reforms within the public sector are expected to create new opportunities for investing in digital services. The legislative package adopted by the Finnish Parliament in June 2021 launched the reform of social services and healthcare in Finland. The reform itself is a momentous project, and in the longer term, the acute development need for digitalisation of healthcare will also feature more prominently on the agenda. The company estimates that the EU recovery tool’s investment in the green transition and digitalisation for 20212023 will also generate increased demand for Gofore’s services in the form of public investments. In Finland, traditional large Finnish IT houses and agile providers of new digital services are the main competitors for public sector customers. The competitive landscape has remained stable and Gofore’s position in the market is expected to remain strong.
In Finland’s private sector, digitalisation remains one of the most important strategic priorities. IT development still partially remains the internal activity of companies and organisations, and companies and organisations hire specialists of the field for various IT tasks. Both domestic and international IT service providers continue to offer top external expertise to Finnish private sector operators. The outlook of the export industry, being of particular relevance for Gofore, is rather good, and the company estimates this will improve investments by export companies also in the field of digitalisation. Investments will focus on new digital services, data management and its utilisation, as well as the development of digitalisation capabilities. Gofores comprehensive offering of digital advisory services is expected to cater well the private sector demand.
In a business based on top-level expertise, competition for the best talent has continued to intensify. The willingness of specialists, especially of technical experts and software developers, to change jobs has increased across the industry after the initial, calmer stage at the beginning of the corona pandemic, throughout the year. Freelance work, location-independent work, and similar models have also proliferated, propelled by the corona pandemic and the associated remote working models. The demand for skilled workforce will continue to be high and will increasingly also apply to digitalisation experts other than experienced technical and software developers. Due to the high demand, the risk of wage inflation has increased.
Markets outside of Finland, especially in Germany, are developing broadly in line with the Finnish market. Outside of Finland, Gofore’s customers are mainly within the private sector. In the long term, the company continues to estimate demand for its services to be on the rise, owing to their extensive market potential.
The effects of the COVID-19 pandemic
In Gofore’s main market in Finland, the impacts of the coronavirus pandemic on Gofore’s important public and private sector customer segments have remained minor. The uncertainty entailed by the coronavirus has receded or is rapidly receding in many industries. Investments in digitalisation are being prioritised higher. Customers are also investing in improving their own capabilities.
Regarding the markets outside of Finland relevant for Gofore, especially in Germany, the coronavirus pandemic has had a greater direct impact, which has been reflected in a slight decrease in new customer acquisition. In Germany, however, the recovery has been rapid.
Financial review 1 January 30 June 2021
Net sales development
January June 2021
During the period of January June 2021, net sales increased by 38.3 per cent compared to the corresponding period in 2020 and amounted to EUR 51.7 (37.4) million. The growth was primarily attributable to increased volumes as a result of corporate acquisitions and organic growth. The average hourly price of services sold also increased slightly.
The net sales generated from public sector sales increased to EUR 33.3 (27.8) million and the net sales generated from private sector sales increased to EUR 18.4 (9.6) million. The public sector accounted for 64.4 (74.3) per cent of the Groups net sales, and the private sector accounted for 35.6 (25.7) per cent.
In geographic consolidation, the majority of the net sales growth occurred in Finland. The net sales generated from Finland amounted to EUR 47.2 (33.3) million and accounted for 91.3 (89.1) per cent of the Groups net sales. Other countries accounted for 8.7 (10.9) per cent of the Groups net sales, amounting to EUR 4.5 (4.1) million.
During the review period, 18.7 (16.8) per cent, amounting to EUR 9.7 (6.3) million, of Groups net sales were generated through services performed by subcontracting.
April June 2021
During the period of April June 2021, net sales increased by 42.5 per cent compared to the corresponding period in 2020 and amounted to EUR 26.4 (18.6) million. The growth was primarily attributable to increased volumes as a result of corporate acquisitions and organic growth. The average hourly price of services sold also increased slightly.
Monthly development of net sales in January June 2021:
| Month (2021) | Net sales (MEUR) | Number of employees | Number of working days in Finland | Overall capacity, FTE1 | Subcontracting, FTE2 |
| January | 7.5 (6.1) | 727 | 19 (21) | 679 | 109 |
| February | 8.1 (5.9) | 736 | 20 (20) | 689 | 111 |
| March | 9.7 (6.8) | 790 | 23 (22) | 735 | 118 |
| April | 8.5 (6.4) | 791 | 20 (20) | 743 | 112 |
| May | 8.8 (6.0) | 799 | 20 (19) | 755 | 109 |
| June | 9.1 (6.1) | 803 | 21 (21) | 755 | 108 |
Unless otherwise specified, all figures presented in brackets refer to the corresponding period the previous year.
1 The Overall capacity, FTE (Full Time Equivalent) figure shows the 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 personnel capacity of corporate acquisitions has been accounted for as of the date of the acquisition.
2 The Subcontracting, FTE (Full Time Equivalent) figure shows the overall amount of subcontracting used in invoiceable work, converted into a value corresponding to the number of full-time employees. The subcontracting of the companies acquired by Gofore has been accounted for as of the date of the acquisition.
Profitability
January June 2021
During the period of January June 2021, adjusted EBITA increased by 23.3 per cent compared to the corresponding period in 2020 and amounted to EUR 6.9 (5.6) million and accounted for 13.4 (15.1) per cent of net sales.
Adjusted EBITA was affected by add-back of transaction costs from business combinations EUR 0.2 million. Adjusted EBITA in the comparison period was increased by a EUR 0.7 million adjustment of the UK business restructuring costs. The calculation of adjusted EBITA is presented at the end of the tables section.
EBITA for January June 2021 amounted to EUR 6.8 (4.9) million and accounted for 13.1 (13.1) per cent of net sales.
The proportion of personnel expenses of net sales remained at the level of the comparison period, accounting for 57.8 (57.9) per cent. For January June 2021, personnel expenses amounted to EUR 29.9 (21.6) million. The increase is attributable to the growth in the number of personnel.
Other operating expenses amounted to a total of EUR 5.4 (4.9) million and accounted for 10.5 (13.1) per cent of net sales. The largest expense items included other personnel expenses, ICT expenses and external services.
Depreciations excluding amortizations of intangible assets related to acquisitions were EUR 1.4 (1.2) million, accounting for 2.6 (3.2) percent of net sales.
Operating profit (EBIT) in January June 2021 amounted to EUR 5.7 (4.5) million and accounted for 11.0 (12.0) per cent of net sales.
Depreciations and amortizations were EUR 2.4 (1.6) million and accounted for 4.7 (4.3) per cent of net sales
Finance costs and income were EUR -0.7 million. The costs related to listing on the official list of Nasdaq Helsinki Ltd were EUR -0.7 million.
The profit for the financial period amounted to EUR 3.9 (3.2) million.
April June 2021
During the period of April June 2021, adjusted EBITA amounted to EUR 3.4 (2.5) million and accounted for 13.0 (13.3) per cent of net sales.
Balance sheet, cash flow and financing
The liquidity of the Group was good and financing position solid. The equity ratio amounted to 56.8 (56.9) per cent, with the net gearing being -30.8 (-29.5) per cent.
At the end of June 2021, the balance sheet total of the Gofore Group amounted to EUR 98.6 (58.0) million, of which shareholders equity accounted for EUR 55.7 (32.6) million. At the end of the review period, net debt amounted to EUR -17.1 (-9.6) million.
Cash flow from operations improved over the period of January June 2021 to EUR 4.8 (3.9) million. The cash flow from investments during the review period amounted to EUR -8.8 (-0.8) million. Investments in subsidiary shares during the review period amounted to EUR 8.7 (0.5) million.
Cash flow from financing activities during the period amounted to EUR 16.0 (-5.0) million, including paid dividends of EUR -3.4 million, repayments of lease agreement liabilities of EUR -1.1 million, loan drawdowns of EUR 3.0 million, loan amortisations of EUR -1.2 million and paid share issue, net EUR 18.6 million. At the end of the review period, cash assets amounted to EUR 33.4 (19.5) million.
At the end of the review period, Gofore Plcs unsecured loans from credit institutions amounted to EUR 11.4 (5.2) million. Gofore raised a new unsecured loan of EUR 3.0 million during the review period. The loans are associated with the customary covenants tied to the equity ratio and interest-bearing net debt. The covenant conditions were met on 30 June 2021.
During the review period, Gofore Plc signed a binding, unsecured revolving credit facility of EUR 5 million for the short-term general financing needs of the Group, such as corporate acquisitions. At the end of the review period, the credit facility remained undrawn.
Significant customer agreements January June 2021
During the review period, Gofore concluded new agreements and extended existing agreements with its customers. The company has published the significant agreements in its company and stock exchange releases:
In January (21 January 2021), the Finnish Tax Administration selected a Gofore Group company Qentinel Finland as its preferred service provider for technical project manager services supporting information system development and support. The duration of the framework agreement is six years, and the assignments carried out during the framework agreement period may continue for four years after the expiration of the framework agreement. The estimated total value of the agreement is approximately EUR 10 12 million. The agreement is an extension of the previous agreement between the Finnish Tax Administration and Gofore.
In March (10 March 2021), the Finnish Tax Administration selected a Gofore Group company Gofore Lead Oy as its management consulting services provider. The object of the procurement consisted of management consulting services for three different segments: management support based on research services, support for operations development, as well as support for the implementation of the operational models and project management. One provider was selected for each of these. Gofore was selected as the provider for the operations development support segment. The estimated total value of the framework agreement is approximately EUR 8 million. The estimated total value determines the maximum number of orders during the agreement period. The agreement is an extension of the previous agreement between the Finnish Tax Administration and Gofore.
In March (29 March 2021), the City of Helsinki selected Gofore as the service provider for the development of the information system package for the Education Division. The value of the agreement is up to EUR 3 million, spanning the years of 2021 2022. The agreement is an extension of the previous agreement between the City of Helsinki and Gofore.
In March (30 March 2021), the City of Espoo selected a Gofore Group company Gofore Lead Oy as its preferred provider of ICT consulting advisory services. The duration of the framework agreement is seven years. The estimated total value of the agreement is approximately EUR 25 million.
Group structure
At the end of June 2021, the Gofore Group consisted of the parent company Gofore Plc and its fully-owned subsidiaries Gofore Germany GmbH, Gofore Spain SL, Gofore Estonia Oü, Gofore Lead Oy, Gofore Vantaa Oy and Qentinel Finland Oy. In addition, also Rebase Consulting Oy, of which the parent company owns 68 per cent, and CCEA Ltd of which the parent company owns 95 per cent, were parts of the Group. Silver Planet Oys name changed as of 1 January 2021 to Gofore Lead Oy. CCEA Oy became part of the Group on 1 March 2021. CCEA Oy has a fully-owned subsidiary, Celkee Oy.
Corporate acquisitions
On 18 February 2021, Gofore announced it had signed an agreement to acquire 95 per cent of the shares in CCEA Oy, a company specialising in change execution consulting. The purchase price of EUR 6.5 million of the share capital to be acquired consisted of a debt-free price of EUR 6.2 million for the business and a compensation for net cash, at EUR 0.3 million. The purchase price was paid in full as a cash consideration. The transaction was completed on 1 March 2021.
Personnel and offices
At the end of June 2021, the Group employed a total of 803 (610) employees. The number of personnel increased from the corresponding period in 2020 by 31.6 per cent. Growth occurred particularly in Finland, as a result of the CCEA Oy corporate acquisition. The number of employees in Finland amounted to 770 (580), and in the other countries of operation to a total of 33 (30) employees.
Gofores offices are located in Helsinki, Espoo, Jyväskylä, Tampere and Turku. Its offices located outside of Finland are in Brunswick and Munich in Germany, Madrid in Spain, and Tallinn in Estonia.
Research and development
In the review period of January April 2021, Gofore was conducting a research project called Robins, funded by Business Finland. In addition to Tampere Universities and Gofore, the project consortium included five other advisory companies in Finland. Gofores Robins project consists of the strategic development projects Capability Accelerator and Digital Gofore. The Capability Accelerator project entailed researching methods for the continuous renewal of the companys competencies and, thereby, of its service offering. The Digital Gofore project entailed studying the companys transformation into an internationally operating player that serves as more of a platform. From 1 January through 30 April 2021, the costs of the project amounted to approximately EUR 0.2 million. Business Finlands subsidy is no more than 40 per cent of the acceptable overall costs of the project, which amounted to approximately EUR 1.6 million during the project period of 1 April 2019 through 30 April 2021. The Robins research project ended during the review period.
In addition, the company was engaged in a project funded by Business Finland, aimed to support business continuity in the coronavirus pandemic and to find novel ways to generate customer value in a changed environment. The project involved, inter alia, the development of new methods for remote working. Business Finlands subsidy is no more than 80 per cent of the acceptable overall costs of the project, which amounted to approximately EUR 0.13 million during the project period of 24 March 2020 through 30 April 2021.
Resolutions of the Annual General Meeting
The Annual General Meeting of Gofore Plc convened on 26 March 2021. Pursuant to the temporary legislation enacted by the Finnish Parliament in an effort to restrain the spread of the coronavirus pandemic, the Annual General Meeting was convened without the presence of the shareholders and their representatives at the meeting venue.
The Annual General Meeting resolved to adopt the financial statements for the financial year 2020 and to grant discharge from liability to all persons who acted as members of the Board of Directors or as the CEO for the financial year 1 January 2020 31 December 2020. The Annual General Meeting authorised the Board of Directors, in accordance with the Board of Directors proposal, to resolve on the repurchase and/or on the acceptance as pledge of the companys own shares. The Annual General Meeting further authorised the Board of Directors, in accordance with the Board of Directors proposal, to resolve on the issuance of shares as well as the issuance of option rights and other special rights entitling to shares.
The Annual General Meeting resolved to affirm the companys Remuneration Report for the year 2020 for the governing bodies of the company, enclosed that to the Notice of the Annual General Meeting.
The Annual General Meeting resolved, in accordance with the proposal of the Shareholders Nomination Committee, that the members of the Board of Directors be paid a fee of EUR 2,000 per month and the Chairman of the Board of Directors EUR 3,500 per month. In addition, the Annual General Meeting resolved that the members of the Board of Directors be remunerated for committee work of the Board of Directors as follows: the committee chair is to be paid EUR 800 per meeting, and the other members of the committee EUR 400 per meeting. Additionally, all travel expenses of the members of the Board of Directors are to be compensated in accordance with the companys travel policy against receipts.
The Annual General Meeting resolved, in accordance with the proposal of the Shareholders Nomination Committee, that the number of the members of the Board of Directors shall be five: Timur Kärki, Sami Somero, Mammu Kaario and Juha Eteläniemi were re-elected as members of the Board of Directors and Piia-Noora Kauppi was elected as a new member of the Board of Directors. In its organisation meeting, the Board of Directors elected a chairman from among its members, and Timur Kärki was elected to continue as the Chairman. The term of office of the members of the Board of Directors will continue until the end of the next Annual General Meeting.
The Annual General Meeting resolved, in accordance with the proposal of the Board of Directors, to re-elect Auditing Entity KPMG Oy Ab as the companys auditor, with its term of office continuing until the end of the next Annual General Meeting. KPMG Oy Ab has designated Authorised Public Accountant Lotta Nurminen to act as the auditor with principal responsibility. The Annual General Meeting resolved, in accordance with the proposal of the Board of Directors, that the auditor will be paid a fee as per an invoice approved by the company.
The Annual General Meeting resolved, in accordance with the proposal of the Board of Directors, that dividend be paid for the financial year 1 January 2020 31 December 2020 in the amount of EUR 0.24 per share, i.e., calculated for the shares outstanding at the date of the meeting, a total of EUR 3 372 535.44, and the remaining distributable assets be retained in equity. The date of record for the dividend was 30 March 2021 and the payment date was 8 April 2021.
Authorisation of the Board of Directions to decide on the repurchase and/or on the acceptance as pledge of the companys own shares, and the issuance of shares, share options and other special rights
Gofore Plcs Annual General Meeting of 26 March 2021 resolved to authorise the Board of Directors to decide on the repurchase and/or on the acceptance as pledge of the companys own shares in one or more tranches. The maximum number of shares to be acquired amounts to 1,403,692 shares, which corresponds to approximately 10 per cent of the total number of all the shares of the company as per the date of the notice of the Annual General Meeting.
In addition, Gofore Plcs 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 consideration or gratuitously. The total number of shares to be issued, including shares under options and other special rights, may amount to a maximum of 2,105,540 shares, equivalent to approximately 15 per cent of the total number of shares of the company as per the date of the notice of the Annual General Meeting.
Both authorisations are valid until the closing of the next Annual General Meeting, however, no longer than 30 June 2022, and both authorisations revoke corresponding authorisations previously given by the Annual General Meeting.
All resolutions of the Annual General Meeting are available from the companys Annual General Meeting website at gofore.com/agm2021/
Shares and shareholders
At the end of June 2021, Gofore Plcs registered share capital amounted to EUR 80,000.00 (EUR 80,000.00), corresponding to a total of 15,052,231 (14,012,802) company shares. At the end of the review period, the company or its subsidiaries were not in possession of any treasury shares (33 859).
At the end of June 2021, the company had a total of 6,170 (3,348) registered shareholders. Foreign ownership accounted for a total of 0.13 (0.10) per cent. Holders of nominee registered shares owned a total of 14.81 (0.23) per cent of the shares, and the total number of such shares amounted to 2,229,391 (32,570). Households owned 60.65 (75.95) per cent of the shares, private companies 5.49 (5.72) per cent, financial and insurance institutions 24.03 (7.36) per cent, non-profit organisations 0.30 (0.09) per cent and public corporations 9.41 (10.78) per cent.
Announcements of changes in shareholders holdings
On 23 April 2021, the company announced it had on 23 April 2021 received a notification from Jani Lammi, one of Gofores founding partners, pursuant to Chapter 9, Section 5 of the Finnish Securities Market Act, stating that Jani Lammis shareholding and voting power had fallen below the 10 per cent threshold on 23 April 2021. Following the notification, Jani Lammi owns 1,260,000 shares in Gofore, corresponding to 8.37 per cent of the shares and votes in Gofore Plc.
On 23 April 2021, the company announced it had on 23 April 2021 received a notification from Petteri Venola, one of Gofores founding partners, pursuant to Chapter 9, Section 5 of the Finnish Securities Market Act, stating that Petteri Venolas shareholding and voting power had fallen below the 10 per cent threshold on 23 April 2021. Following the notification, Petteri Venola owns 1,470,000 shares in Gofore, corresponding to 9.77 per cent of the shares and votes in Gofore Plc.
On 23 April 2021, the company announced it had on 23 April 2021 received a notification from Mika Varjus, one of Gofores founding partners, pursuant to Chapter 9, Section 5 of the Finnish Securities Market Act, stating that Mika Varjus shareholding and voting power had fallen below the 10 per cent threshold on 23 April 2021. Following the notification, Mika Varjus owns 1,470,000 shares in Gofore, corresponding to 9.77 per cent of the shares and votes in Gofore Plc.
On 23 April 2021, the company announced by means of a managers transactions notification, a change in the shareholding of one of Gofores founding partners, Timur Kärki, stating that Timur Kärki had sold 300,000 Gofore shares. Following the notification, Timur Kärki owns 1,575,000 Gofore shares, corresponding to 10.46 per cent of Gofore Plcs shares.
Directed share issue
On 22 April 2021, the company announced it had carried out a directed share issue of 1,000,000 new shares and raised EUR 19 million as a result. The new shares were entered in the Trade Register on 23 April 2021. In connection with the share issue, Gofores four largest shareholders Jani Lammi, Petteri Venola, Mika Varjus and Timur Kärki, who are also Gofores founding partners, sold a portion of their shareholdings in Gofore.
Share price development and share trading
The trading volume of the companys shares during January June 2021 amounted to 3,19 (0,95) million shares, corresponding to approximately 22 (7) per cent of the average number of outstanding shares. The value of the trading amounted to EUR 61.2 (6.8) million.
At the end of June 2021, the companys market value amounted to EUR 273.2 (111.3) million. The closing price of Gofores share on the last trading day of the review period (30 June 2021) was EUR 18.15 (7.96). The trading volume-weighted average price of the companys share during the review period amounted to EUR 19.21 (7.18). The highest trading price was EUR 24.20 (8.90) and the lowest EUR 16.00 (4.80).
Since March 2021, Gofore Plcs share has been quoted on the official stock exchange list maintained by Nasdaq Helsinki Ltd, under the share trading code GOFORE.
Further information concerning Gofores share and shareholders is available from gofore.com/invest.
Share-based loyalty and remuneration schemes
In the autumn of 2018, Board of Directors of the company resolved on the implementation of a share savings plan (CrewShare) for the entire Group’s personnel. The Board of Directors resolves annually on the savings periods to be launched under the plan.
The plan is available to all Gofore Groups employees, who are offered the possibility to save a portion of their regular salaries and to allocate the savings towards acquiring shares in the company at a 10 per cent discount, if the Board of Directors of the company so resolves. The accrued savings are allocated towards acquiring Gofores shares after the expiration of the savings period. The first savings period commenced on 1 November 2018 and ended on 28 February 2019. The second savings period commenced on 1 March 2019 and ended on 29 February 2020. The third savings period commenced on 1 March 2020 and ended on 28 February 2021. The fourth savings period commenced on 1 March 2021 and is due to end on 28 February 2022.
After the two-year ownership period, Gofore will offer employees participating in the plan one matching share for each three shares acquired with the savings by way of gross incentive. The granting of the matching shares is contingent on the participant owning the shares they have acquired throughout the entire ownership period and their employment relationship with Gofore not having been terminated prior to the expiration of the ownership period.
By 30 June 2021, the company has carried out a total of four CrewShare savings periods. The first CrewShare savings period ended on 28 February 2019 and matching shares of the period were granted on 25 March 2021. 186 employees took part in the second CrewShare savings period, and were on 30 June 2021 entitled to 13,757 matching shares. During the third savings period, 208 employees were on 30 June 2021 entitled to 11,244 matching shares based on participation in the period. 326 employees participated in the fourth savings period, and their rights to matching shares will be determined later in connection with the acquisition of shares.
Significant events after the review period
In July (8 July 2021), the Finnish Institute of Occupational Health selected Gofore as its development partner for IT consultancy and maintenance services. The advisory services focus on the development and maintenance of digital services and systems, as well as the related consulting and training. In connection with the procurement, the Finnish Institute of Occupational Health estimated the annual work amount to be 1,200 2,000 man-days, based on which the estimated value of the agreement is approximately EUR 0.9 1.5 million per year. The agreement is valid until further notice. The agreement is an extension of the previous agreement between the Finnish Institute of Occupational Health and Gofore.
The net sales of the Gofore Group in July 2021 amounted to EUR 2.7 (2.4) million. The number of personnel at the end of the review period amounted to 797. The number of working days in Finland during the period amounted to 22. The overall capacity Full Time Equivalent (FTE) amounted to 746 and subcontracting FTE to 38.
| Month (2021) | Net sales, MEUR | Number of employees | Number of working days in Finland | Overall capacity, FTE1 | Subcontracting, FTE2 |
| July | 2.7 (2.4) | 797 | 22 (23) | 746 | 38 |
Unless otherwise specified, all figures presented in brackets refer to the corresponding period the previous year.
1 The Overall capacity, FTE (Full Time Equivalent) figure shows the 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.
2 The Subcontracting, FTE (Full Time Equivalent) figure shows the overall amount of subcontracting used in invoiceable work, converted into a value corresponding to the number of full-time employees.
Short-term risks and business uncertainty factors
The company continues to consider that the most notable short-term risks are related to the changes in the companys operating environment caused by the coronavirus pandemic. The prolonged pandemic circumstances are creating uncertainty in the development of customer demand and personnel wellbeing. With the exception of the pandemic circumstances, the companys short-term risks are similar to those in the preceding years.
The company is of the view that negative changes in the investments in IT development within the public sector would pose challenges for the implementation of the companys growth strategy. Similarly, any stiffening in the competitive environment within the companys business segments could impact the profitability and growth of the company.
Succeeding in recruiting skilled personnel and ensuring personnel satisfaction are matters of the utmost importance and failing in same would have an adverse effect on the attainment of the financial targets of the company. Due to the high demand for skilled personnel, the risk of wage inflation has increased.
A vital part of the companys strategy lies in corporate acquisitions and the expansion of its international business. Both of these modes of action geared towards growth entail risks that, if actualised, would pose challenges for maintaining personnel and customer satisfaction, and, naturally, for achieving the companys financial targets.
The company publishes a monthly Business Review, also containing the managements assessment of the development of the business during the review period. This entails the monthly monitoring of any actualisation of risks.
Financial reporting in 2021
Gofore will publish its Q3/2021 Business Review (1 July 30 September 2021) on Thursday 14 October 2021.
Furthermore, the company publishes a monthly Business Review containing the number of personnel in the Group and the monthly net sales, along with the comparison information, the managements assessment of the development of business operations during the review period, and other key figures that facilitate the monitoring of the implementation of the companys growth strategy.
The financial reporting schedule for 2022 will be published at the end of 2021.
Webcast of the results presentation for the half-year review for 1 January 30 June 2021
A webcast of the results presentation open for all will be arranged on Friday, 13 August 2021 at 13 p.m. EET. The results will be presented by CEO Mikael Nylund and CFO Teppo Talvinko. The webcast will be held in English and may be followed at https://gofore.videosync.fi/2021-h1-results. During the session, attendees can post questions via a chat function for a Q&A session held at the end of the webcast. The presentations and a recording of the webcast will be available after the event at gofore.com/invest.
Financial information 1 January 30 June 2021
Tables section
Consolidated Statement of Profit and Loss and Other Comprehensive Income
| EUR thousand | 1 Jan30 Jun 2021 | 1 Jan30 Jun 2020 | 1 Jan31 Dec 2020 | ||
| Revenue (net sales) | 51,679 | 37,376 | 77,953 | ||
| Production for own use | 104 | 331 | 738 | ||
| Other operating income | 80 | 246 | 599 | ||
| Materials and Services | |||||
| Purchases | -76 | -55 | -225 | ||
| External services | -8,338 | -5,278 | -12,519 | ||
| Total materials and services | -8,414 | -5,333 | -12,744 | ||
| Employee benefit expenses | |||||
| Salaries and compensations | -24,744 | -18,200 | -37,344 | ||
| Pensions | -4,113 | -2,673 | -5,587 | ||
| Other indirect employee expenses | -1,031 | -754 | -1,502 | ||
| Total employee benefit expenses | -29,888 | -21,627 | -44,433 | ||
| Depreciations, amortisations and impairment | -2,440 | -1,608 | -3,579 | ||
| Other operating expenses | -5,446 | -4,891 | -9,785 | ||
| Operating profit (EBIT) | 5,675 | 4,495 | 8,750 | ||
| Finance costs | -756 | -126 | -202 | ||
| Finance income | 23 | 34 | 67 | ||
| Profit before tax | 4,942 | 4,403 | 8,615 | ||
| Income tax | -998 | -1,169 | -1,712 | ||
| Profit for the financial period | 3,944 | 3,234 | 6,903 | ||
| 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 | 3 | -30 | -33 | ||
| Other comprehensive income, net of tax | 3 | -30 | -33 | ||
| Total comprehensive income for the financial period | 3,948 | 3,204 | 6,870 | ||
| EUR thousand | 1.1.30.6.2021 | 1.1.30.6.2020 | 1.1. 31.12.2020 | ||
| Profit/loss for the financial period attributable to: | |||||
| Equity holders of the parent | 3,905 | 3,236 | 6,895 | ||
| Non-controlling interests | 39 | -2 | 8 | ||
| 3,944 | 3,234 | 6,903 | |||
| Total comprehensive income for the financial period attributable to: | |||||
| Equity holders of the parent | 3,908 | 3,206 | 6,862 | ||
| Non-controlling interests | 39 | -2 | 8 | ||
| 3,948 | 3,204 | 6,870 | |||
| Earnings per share | |||||
| Earnings per share, undiluted | 0.27 | 0.23 | 0.49 | ||
| Earnings per share, diluted | 0.27 | 0.23 | 0.49 | ||
| Consolidated Statement of Financial Position | |||
| EUR thousand | 30 Jun 2021 | 30 Jun 2020 | 31 Dec 2020 |
| Assets | |||
| Non-current assets | |||
| Goodwill | 26,897 | 16,180 | 23,311 |
| Other intangible assets | 12,469 | 3,723 | 10,506 |
| Tangible assets | 451 | 512 | 461 |
| Right-of-use assets | 5,511 | 5,342 | 6,835 |
| Investments | 0 | 51 | 0 |
| Other receivables | 764 | 9 | 772 |
| Deferred tax assets | 19 | 16 | 14 |
| Total non-current assets | 46,111 | 25,832 | 41,899 |
| Current assets | |||
| Trade receivables | 14,219 | 10,209 | 11,478 |
| Contract assets | 1,286 | 214 | 434 |
| Other current assets | 2,744 | 1,604 | 2,441 |
| Income tax receivables | 253 | 0 | 174 |
| Securities | 563 | 604 | 544 |
| Cash and cash equivalents | 33,399 | 19,496 | 21,394 |
| Total current assets | 52,464 | 32,126 | 36,465 |
| Total assets | 98,585 | 57,958 | 78,363 |
| Equity and liabilities | |||
| Equity | |||
| Share capital | 80 | 80 | 80 |
| Translation differences | -9 | -10 | -12 |
| Fund for unrestricted equity | 39,743 | 20,323 | 20,515 |
| Retained earnings | 15,646 | 12,239 | 15,476 |
| Equity attributable to equity holders of the parent | 55,460 | 32,633 | 36,059 |
| Non-controlling interests | 223 | 13 | 23 |
| Total equity | 55,683 | 32,646 | 36,082 |
| Non-current liabilities | |||
| Interest-bearing loans and borrowings | 8,750 | 3,784 | 7,500 |
| Other interest-bearing liabilities | 765 | 148 | 767 |
| Lease liabilities | 3,477 | 3,217 | 4,495 |
| Deferred tax liabilities | 2,345 | 691 | 1,971 |
| Total non-current liabilities | 15,337 | 7,840 | 14,733 |
| Current liabilities | |||
| Trade and other payables | 11,309 | 5,430 | 12,113 |
| Contract liabilities | 982 | 628 | 1,685 |
| Interest-bearing loans and borrowings | 2,600 | 1,376 | 2,000 |
| Lease liabilities | 2,077 | 2,155 | 2,375 |
| Accrued expenses | 10,119 | 7,517 | 9,137 |
| Income tax payable | 468 | 367 | 239 |
| Total current liabilities | 27,555 | 17,472 | 27,549 |
| Total liabilities | 42,892 | 25,313 | 42,282 |
| Total equity and liabilities | 98,575 | 57,958 | 78,363 |
| Consolidated Statement of Changes in Equity | ||||||||
| 1 Jan30 Jun 2021 | Attributable to the equity holders of the parent | |||||||
| EUR thousand | Share capital | Fund for unrestricted equity | Translation differences | Retained earnings | Total | Non-controlling interests | Total equity | |
| Equity on 1 Jan 2021 | 80 | 20,515 | -12 | 15,476 | 36,059 | 23 | 36,082 | |
| Profit for the period | 3,905 | 3,905 | 39 | 3,944 | ||||
| Other comprehensive income | 3 | 3 | 0 | 3 | ||||
| Total comprehensive income | 0 | 0 | 3 | 3,905 | 3,908 | 39 | 3,948 | |
| Share-based payments | 211 | 64 | 275 | 275 | ||||
| Dividends | -3,373 | -3,373 | -3,373 | |||||
| Share Issue | 19,017 | -425 | 18 592 | 8 | 18,600 | |||
| Non-controlling interest | -1 | -1 | 152 | 151 | ||||
| Equity on 30 Jun 2021 | 80 | 39,743 | -9 | 15,646 | 55,460 | 223 | 55,683 | |
| 1 Jan30 Jun 2020 | Attributable to the equity holders of the parent | |||||||
| EUR thousand | Share capital | Fund for unrestricted equity | Translation differences | Retained earnings | Total | Non-controlling interests | Total equity | |
| Equity on 1 Jan 2020 | 80 | 20,323 | 21 | 12,008 | 32,432 | 0 | 32,432 | |
| Profit for the period | 3,236 | 3,236 | -2 | 3,234 | ||||
| Other comprehensive income | -30 | -30 | 0 | -30 | ||||
| Total comprehensive income | 0 | 0 | -30 | 3,236 | 3,206 | -2 | 3,204 | |
| Share-based payments | 174 | 174 | 174 | |||||
| Dividends | -2,801 | -2,801 | -2,801 | |||||
| Purchase of own shares | -409 | -409 | -409 | |||||
| Acquisition of non-controlling interests | 0 | 15 | 15 | |||||
| Other changes | 31 | 31 | 31 | |||||
| Equity on 30 Jun 2020 | 80 | 20,323 | -10 | 12,239 | 32,633 | 13 | 32,646 | |
| Consolidated Statement of Cash Flows | ||||
| EUR thousand | 1 Jan30 Jun 2021 | 1 Jan30 Jun 2020 | 1 Jan31 Dec 2020 | |
| Operating activities | ||||
| Profit before tax | 4,942 | 4,403 | 8,615 | |
| Adjustments to reconcile profit before tax to net cash flows: | ||||
| Depreciation and impairment | 2,440 | 1,608 | 3,579 | |
| Finance income and expenses | 733 | 92 | 149 | |
| Other adjustments | 303 | 530 | -21 | |
| Change in working capital | -1,770 | -1,624 | -1,203 | |
| Interest received and paid | -97 | -64 | -161 | |
| Other financial items | -657 | 0 | 0 | |
| Income tax paid | -1,068 | -1,015 | -2,003 | |
| Net cash flow from operating activities | 4,826 | 3,930 | 8,955 | |
| Net cash flow from investing activities | ||||
| Proceeds from sale of tangible and intangible assets | 0 | 0 | 31 | |
| Purchase of intangible assets | -104 | -331 | -698 | |
| Purchase of tangible assets | -22 | -7 | -75 | |
| Proceeds from sale of financial instruments | 0 | 0 | 139 | |
| Acquisition of a subsidiary, net of cash acquired | -8,665 | -471 | -6,492 | |
| Net cash flow from investing activities | -8,791 | -809 | -7,095 | |
| Net cash flow from financing activities | ||||
| Treasury shares acquired | 0 | -409 | -468 | |
| Repayment of lease liabilities | -1,100 | -1,071 | -2,192 | |
| Proceeds from borrowings | 3,000 | 0 | 10,000 | |
| Repayment of borrowings | -1,150 | -702 | -6,362 | |
| Share issue | 19,017 | 0 | 0 | |
| Transaction costs on issue shares | -425 | 0 | 0 | |
| Dividends paid to equity holders of the parent | -3,373 | -2,801 | -2,801 | |
| Net cash flow from financing activities | 15 969 | -4,983 | -1,823 | |
| Net increase in cash and cash equivalents | 12,005 | -1,863 | 36 | |
| Cash and cash equivalents at 1 Jan | 21,394 | 21,358 | 21,358 | |
| Cash and cash equivalents at 31 Dec | 33,399 | 19,496 | 21,394 | |
Notes to 1 January 30 June 2021 Half-Year report
Distribution of net sales
| Net sales by customer sector | |||
| EUR thousand | 1 Jan30 Jun 2021 | 1 Jan30 Jun 2020 | 2020 |
| Private sector sales | 18,417 | 9,603 | 20,116 |
| Public sector sales | 33,262 | 27,773 | 57,837 |
| Net sales, Group total | 51,679 | 37,376 | 77,953 |
| Net sales by origin of customer | |||
| EUR thousand | 1 Jan30 Jun 2021 | 1 Jan30 Jun 2020 | 2020 |
| Finland | 47,187 | 33,285 | 69,880 |
| Other countries | 4,491 | 4,091 | 8,073 |
| Net sales, Group total | 51,679 | 37,376 | 77,953 |
| Timing of revenue recognition | |||
| EUR Thousand | 1 Jan30 Jun 2021 | 1 Jan30 Jun 2020 | 2020 |
| Services transferred at a point in time | 266 | 114 | 273 |
| Services transferred over time | 51,413 | 37,261 | 77,680 |
| Net sales Group total | 51,679 | 37,376 | 77,953 |
Intangible assets
| 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 | 8,427 | 2,577 | 0 | 0 | 0 | 895 | 12,359 | 23,312 | 35,670 |
| Additions | 0 | 0 | 0 | 0 | 0 | 0 | 104 | 104 | 0 | 104 |
| Business combinations | 258 | 1,559 | 861 | 66 | 200 | 101 | 0 | 3,045 | 3,586 | 6,630 |
| 30 June 2021 | 672 | 10,031 | 3,438 | 66 | 200 | 101 | 999 | 15,507 | 26,897 | 42,404 |
| Amortisation and impairment | ||||||||||
| 1 January 2021 | -69 | -1,360 | -406 | 0 | 0 | 0 | -17 | -1,853 | 0 | -1,853 |
| Amortisation | -132 | -661 | -263 | -4 | -22 | -14 | -88 | -1,186 | 0 | -1,186 |
| 30 June 2021 | -201 | -2,022 | -669 | -4 | -22 | -14 | -106 | -3,038 | 0 | -3,038 |
| Net book value | ||||||||||
| 1 January 2021 | 345 | 7,112 | 2,171 | 0 | 0 | 0 | 878 | 10,506 | 23,312 | 33,818 |
| 30 June 2021 | 470 | 8,010 | 2,769 | 62 | 178 | 86 | 893 | 12,469 | 26,897 | 39,366 |
| 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 2020 | 0 | 3,272 | 1,067 | 0 | 0 | 0 | 157 | 4,496 | 16,180 | 20,676 |
| Additions | 0 | 0 | 0 | 0 | 0 | 0 | 331 | 331 | 0 | 331 |
| 30 June 2020 | 0 | 3,272 | 1,067 | 488 | 4,827 | 16,180 | 21,006 | |||
| Amortisation and impairment | ||||||||||
| 1 January 2020 | 0 | -532 | -144 | 0 | 0 | 0 | -7 | -684 | 0 | -684 |
| Amortisation | 0 | -327 | -89 | 0 | 0 | 0 | -4 | -420 | 0 | -420 |
| 30 June 2020 | 0 | -860 | -233 | 0 | 0 | 0 | -11 | -1,104 | 0 | -1,104 |
| Net book value | ||||||||||
| 1 January 2020 | 0 | 2,740 | 923 | 0 | 0 | 0 | 150 | 3,812 | 16,180 | 19,992 |
| 30 June 2020 | 0 | 2,412 | 834 | 0 | 0 | 0 | 477 | 3,723 | 16,180 | 19,903 |
Tangible assets
| EUR thousand | Machinery and equipment | Other tangible assets | Total |
| Cost | |||
| 1 January 2021 | 879 | 396 | 1,275 |
| Additions | 114 | 0 | 114 |
| Business combinations | -5 | 0 | -5 |
| Disposals | 988 | 396 | 1,384 |
| 30 June 2021 | 879 | 396 | 1,275 |
| Depreciations and impairment | |||
| 1 January 2021 | -631 | -184 | -815 |
| Depreciation charge for the year | -91 | -28 | -118 |
| 30 June 2021 | -721 | -211 | -933 |
| Net book value | |||
| 1 January 2021 | 248 | 212 | 461 |
| 30 June 2021 | 266 | 185 | 451 |
| EUR thousand | Machinery and equipment | Other tangible assets | Total |
| Cost | |||
| 1 January 2020 | 856 | 323 | 1,179 |
| Additions | 6 | 51 | 57 |
| Disposals | -22 | 0 | -22 |
| 30 June 2020 | 839 | 374 | 1,213 |
| Depreciations and impairment | |||
| 1 January 2020 | -458 | -136 | -594 |
| Depreciation charge for the year | -86 | -22 | -108 |
| 30 June 2020 | -544 | -157 | -701 |
| Net book value | |||
| 1 January 2020 | 397 | 187 | 585 |
| 30 June 2020 | 295 | 217 | 512 |
Leases
| EUR thousand | Right-of-use assets, buildings | Right-of-use assets, vehicles | Total |
| 1 January 2021 | 6,730 | 105 | 6,835 |
| Additions | 105 | 32 | 138 |
| Disposals | -829 | -35 | -864 |
| Depreciation charge for the year | -592 | -6 | -598 |
| 30 June 2021 | 5,414 | 96 | 5,511 |
| 1 January 2020 | 5,227 | 83 | 5,309 |
| Additions | 1,138 | 10 | 1,147 |
| Disposals | -29 | -4 | -33 |
| Depreciation charge for the year | -1,051 | -30 | -1,081 |
| 30 June 2020 | 5,284 | 58 | 5,342 |
Corporate acquisitions
During the review period, Gofore acquired 95 per cent of the share capital of CCEA Oy. A preliminary calculation of acquisition cost is presented in the table below. The purchase price EUR 6.5 million was paid as cash consideration. The values of the acquired assets at the time of acquisition were as follows:
| EUR thousand | CCEA Oy | |||
| Purchase price | ||||
| Consideration paid in cash | 6,456 | |||
| Consideration paid in shares | 0 | |||
| Fair value of assets and liabilities recognised on acquisitions | ||||
| Assets | ||||
| Intangible assets | ||||
| Customer relationships | 1,559 | |||
| Trademarks | 258 | |||
| Non-compete agreements | 861 | |||
| Technology based intangibles | 66 | |||
| Models and templates | 200 | |||
| Capitalized development expenditure | 101 | |||
| Intangible assets | 3,045 | |||
| Tangible assets | 114 | |||
| Other assets | 1,142 | |||
| Cash and cash equivalents | 561 | |||
| Total assets | 4,862 | |||
| Liabilities | ||||
| Interest and non-interest bearing liabilities | 1,252 | |||
| Deferred tax liability | 589 | |||
| Total liabilities | 1,841 | |||
| Total identifiable net assets at fair value | 3,021 | |||
| Non-controlling interest | -151 | |||
| Goodwill arising on acquisition | 3,586 | |||
| Cash flow impact of acquisitions | ||||
| Consideration paid in net cash | 6,456 | |||
| Cash and cash equivalents | -561 | |||
| Expenses related to the acquisition | 195 | |||
| Net cash flow on acquisition | 6,090 | |||
Financing
The fair values of financial assets and liabilities are materially consistent with their carrying amounts. For this reason, they are not presented separately in a table format in this half-year report. Gofore Plc had unsecured MFI financing loans of EUR 11.4 (5.2) million at the end of the review period. Gofore raised a new EUR 3.0 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 30 June 2021.
During the review period, Gofore Plc signed 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.
Related party transactions
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.
Commitments
| EUR thousand | 30 Jun 2021 | 30 Jun 2020 | 31 Dec 2020 |
| Pledges on loans | 0 | 7,840 | 0 |
| Commitments total | 0 | 7,840 | 0 |
Accounting principles
This half-year report was prepared in accordance with the IAS 34 Interim Reports standard, applying the same accounting principles and calculation formulas as in the audited financial statements for 1 January 31 December 2020. The figures presented for the half-year period are unaudited. Information concerning the full year 2020 is based on the audited financial statements for 2020. Amendments to the standards taking effect in 2021 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.
In April 2021, the IFRS IC finalized its agenda decision on Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets). In this agenda decision, the IFRS IC considered whether, applying IAS 38, the customer recognises an intangible asset in relation to configuration or customisation of the application software, and if an intangible asset is not recognised, how the customer accounts for the configuration or customisation costs. IFRIC agenda decisions have no effective date, so they are expected to be applied as soon as possible. As the Group has cloud computing arrangements in place, it has started to analyse whether this agenda decision has an impact on the accounting policies applied to implementation costs in cloud computing arrangements. The Group will undertake this analysis during fall 2021, and any impacts will be implemented retrospectively, latest in the financial statements 2021.
| Calculation formulas of Key Figures | ||||
| EBITDA | = | Operating profit + depreciations and amortisation | ||
| EBITDA margin, % | = | Operating profit + depreciations and amortisation | x 100 | |
| Net sales | ||||
| Operating profit before amortisation of intangible assets identified in PPA and impairment of goodwill (EBITA) | = | Operating profit + amortisation of intangible assets identified in PPA + impairment of goodwill | ||
| Operating profit before amortisation of intangible assets identified in PPA and impairment of goodwill (EBITA) margin -% | = | Operating profit + amortisation of intangible assets identified in PPA + impairment of goodwill | x 100 | |
| Net sales | ||||
| Operating Profit (EBIT) margin -% | = | Operating profit | x 100 | |
| Net sales | ||||
| Earnings per share (EPS), diluted, euros | = | Profit for the period attributable for shareholders of the company | x 100 | |
| Weighted average number of shares outstanding during the financial period adjusted for share issues | ||||
| Return on equity (ROE) -% | = | Profit for the period (annualised) | x 100 | |
| Average shareholder’s equity | ||||
| Return on investment (ROI) -% | = | Profit before taxes (annualised) + financial expenses (annualised) | x 100 | |
| Average shareholder’s equity + average interest-bearing loans and borrowings | ||||
| Equity ratio, % | = | Shareholders equity | x 100 | |
| Balance sheet total advances received | ||||
| 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 | x 100 | |
| Shareholders equity | ||||
| Average overall capacity, FTE | = | The Average overall capacity, FTE (Full Time Equivalent) figure shows the 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. | ||
| Average subcontracting, FTE | = | The Average 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 financial period | = | The number of employees at the end of the financial period. | ||
| Alternative Performance Measures | ||||
| 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 and EBITDA EUR thousand | 1 Jan30 Jun 2021 | 1 Jan30 Jun 2020 | 1 Jan31 Dec 2020 |
| EBIT | 5,675 | 4,495 | 8,750 |
| Amortisation of intangible assets identified in PPA | 1,083 | 416 | 1,158 |
| EBITA | 6,758 | 4,911 | 9,908 |
| Transaction costs from business combinations | 195 | – | 321 |
| Restructuring costs | -10 | 719 | 562 |
| Gains or losses from sales of fixed assets | 0 | – | -13 |
| Adjusted EBITA | 6,943 | 5,629 | 10,778 |
| EBIT | 5,675 | 4,495 | 8,750 |
| Depreciations | 1,357 | 1,192 | 2,421 |
| Amortisation of intangible assets identified in PPA | 1,083 | 416 | 1,158 |
| EBITDA | 8,115 | 6,102 | 12,329 |
Further enquiries:
Mikael Nylund, CEO, Gofore Plc
tel. +358 40 540 2280
mikael.nylund@gofore.com
Teppo Talvinko, CFO, Gofore Plc
Tel. +358 40 715 3660
teppo.talvinko@gofore.com
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