Enento Group’s Interim Report 1.1. – 30.9.2021: Quarter with moderate growth after Covid-19 spurt

ENENTO GROUP PLC, STOCK EXCHANGE RELEASE 29 OCTOBER 2021 AT 12.00 EEST

Enento Group’s Interim Report 1.1. – 30.9.2021: Quarter with moderate growth after Covid-19 spurt

SUMMARY

July - September 2021 in brief

• Net sales amounted to EUR 38,6 million (EUR 36,7 million), an increase of 5,2 % (at comparable exchange rates an increase of 4,0%).
• Adjusted EBITDA excluding items affecting comparability was EUR 14,5 million (EUR 14,8 million), a decrease of 2,2 % (at comparable exchange rates an decrease of 3,1 %).
• Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to acquisitions was EUR 11,9 million (EUR 12,4 million), a decrease of 3,6 %.
• Operating profit (EBIT) was EUR 8,9 million (EUR 9,2 million). Operating profit included items affecting comparability of EUR 3,0 million (EUR 3,2 million), mainly arising from amortisation from fair value adjustments of EUR 3,1 million (EUR 3,1 million) related to acquisitions as well as M&A related expense adjustment.
• New services represented 7,6 % (6,3 %) of net sales.
• Free cash flow amounted to EUR 9,9 million (EUR 11,0 million). The effect of items affecting comparability on free cash flow was EUR -0,0 million (EUR -0,6 million).
• Earnings per share was EUR 0,27 (EUR 0,28).
• Comparable earnings per share were EUR 0,37 (EUR 0,38)¹.

January – September 2021 in brief

• Net sales amounted to EUR 120,4 million (EUR 111,1 million), an increase of 8,4 % (at comparable exchange rates an increase of 5,9 %).
• Adjusted EBITDA excluding items affecting comparability was EUR 44,5 million (EUR 39,7 million), an increase of 12,2 % (at comparable exchange rates an increase of 10,2 %).
• Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to acquisitions was EUR 36,9 million (EUR 33,0 million), an increase of 11,8 %.
• Operating profit (EBIT) was EUR 27,5 million (EUR 21,7 million). Operating profit included items affecting comparability of EUR 9,4 million (EUR 11,3 million), mainly arising from amortisation from fair value adjustments of EUR 9,5 million (EUR 9,1 million) related to acquisitions as well as M&A related expenses, reversal of excess redundancy provisions and received insurance compensation.
• New services represented 7,3 % (5,2 %) of net sales.
• Free cash flow amounted to EUR 19,8 million (EUR 23,5 million). The effect of items affecting comparability on free cash flow was EUR -0,3 million (EUR -2,0 million).
• Earnings per share was EUR 0,85 (EUR 0,66).
• Comparable earnings per share were EUR 1,17 (EUR 0,96)¹.

¹ The comparable earnings per share does not contain amortisation from fair value adjustments related to acquisitions or their tax impact.

KEY FIGURES

EUR million	1.7. – 30.9.2021		1.7. – 30.9.2020		1.1. – 30.9.2021		1.1. – 30.9.2020		1.1. – 31.12.2020
Net sales	38,6		36,7		120,4		111,1		151,3
Net sales growth, %	5,2		0,1		8,4		4,1		3,7
Operating profit (EBIT)	8,9		9,2		27,5		21,7		27,8
EBIT margin, %	23,0		25,1		22,8		19,6		18,4
Adjusted EBITDA	14,5		14,8		44,5		39,7		54,0
Adjusted EBITDA margin, %	37,5		40,3		37,0		35,7		35,7
Adjusted operating profit (EBIT)	11,9		12,4		36,9		33,0		45,0
Adjusted EBIT margin, %	30,9		33,7		30,7		29,7		29,7
New services of net sales, %	7,6		6,3		7,3		5,2		5,6
Free cash flow	9,9		11,0		19,8		23,5		32,6
Net debt to adjusted EBITDA, x	2,6		2,4		2,6		2,7		2,6

FUTURE OUTLOOK

Net Sales: Enento Group expects its net sales growth in 2021 to be in the long-term target range (5-10%), exceeding the mid-point of that range.

EBITDA: Enento Group expects its adjusted EBITDA margin to improve somewhat in 2021 compared to previous year.

Capital Expenditure: Enento Group expects its capitalised product development and software expenses in 2021 to exceed the previous year’s level.

The Outlook assumes that exchange rates remain approximately on the same level as in the first half of 2021.

JUKKA RUUSKA, CEO

The global economy continues its post-pandemic recovery, but the growth outlook has been dampened during early autumn. The Delta variant that brought uncertainty to the markets in August has been accompanied by supply chain problems, higher inflation figures and rising energy prices. The supply chain problems have restricted the growth outlook. The pandemic continues to perpetuate uncertainty in the economy and in the markets, which may be reflected in increased credit losses.

The third quarter in 2021 was a quarter of low growth for Enento Group. The Group’s net sales amounted to EUR 38,6 million, representing a year-on-year increase of 5,2 % (at comparable exchange rates 4,0 %). Adjusted EBITDA decreased by 2,2 % (at comparable exchange rates 3,1 %) and amounted to EUR 14,5 million. The Group’s adjusted operating profit excluding items affecting comparability declined by 3,6 % (at comparable exchange rates 4,5 %) and amounted to EUR 11,9 million. Continuous and innovative service development and new services are an important source of growth. The new service development portfolio remains strong and its share of net sales is now at 7,6 % and growing.

Net sales grew in all our three business areas in the third quarter, but the growth rate was much more moderate than in the previous quarter. Consumer information services in the Finnish market began to recover during the period under review and their volume is expected to grow going forward, but the growth of demand for consumer services slowed down in Sweden. Business in the Norwegian market has grown throughout 2021 and continued strong growth was seen in the third quarter. The growth rate of real estate and collateral information services in the Digital Processes business area levelled off. In 2020, the growth in the housing market started accelerating in the third quarter, which is the primary reason behind the record-high net sales in the comparison period. Growth in the Business Insight business area was moderate.

Understanding the customer needs is the strategic key to success in service development and our determined work resulted in significant customer wins in the third quarter. Regulatory reforms and the increasing significance of risk management require the company to adapt, anticipate and understand changes and develop risk management effectively. The increased regulatory requirements for sufficient credit assessments in Sweden have led to higher demand for our risk management services and has significantly increased the use of our expanded credit information reports. In addition, many of our customers have added student loan information to the credit information reports they order. In Finland, one of our significant customers is digitalising their contract processes by taking advantage of our service that allows them to confirm the counterparty’s right to sign for the corporation they represent. Another significant customer started using our postal-code-based housing price index service to monitor and update their housing insurance portfolio.

We can look back on a tremendous ten-year journey that we have with determination travelled together with the whole personnel. Developing the Finnish company Asiakastieto into the Nordic Enento Group has been a wonderful opportunity. For my part, this is the right time to pass the baton to Jeanette Jäger, my Swedish successor, who will start as the Group’s new CEO on 1 January 2022. I want to thank all of our customers, employees, shareholders and partners for their trust, genuine dialogue and excellent cooperation. We are in a great position to move forward.

NEWS CONFERENCE: WEBCAST AND CONFERENCE CALL

Enento Group will hold a webcast and conference call for analysts, investors and media in English on Friday, 29 October 2021 at 3.00 p.m. EEST where CEO Jukka Ruuska and CFO Elina Stråhlman will present the performance and events of the third quarter 2021.

You can follow the English webcast and conference call at:
https://cloud.webcast.fi/enento/2021_1029_enento_q3

To participate in the conference call, please dial in using one of the numbers below:
Finland: +358 (0) 9 4241 7514
Sweden: +46 (0) 8 1211 1105
United Kingdom: +44 (0) 330 027 1503
United States, Montgomery: +1 334-777-6981
The conference ID code: 716324

The presentation material will be available on the company’s investor website at 1.30 p.m. EEST and a recording of the webcast later during the day.

Helsinki, 29 October 2021

ENENTO GROUP PLC
Board of Directors

For further information:
Jukka Ruuska
CEO
Tel. +358 10 270 7111

Distribution:
Nasdaq Helsinki
Major media
enento.com/investors

Enento Group is a Nordic knowledge company powering society with intelligence since 1905. We collect and transform data into intelligence and knowledge used in interactions between people, businesses and societies. Our digital services, data and information empower companies and consumers in their daily digital decision processes, as well as financial processes and sales and marketing processes. Approximately 425 people are working for Enento Group in Finland, Norway, Sweden and Denmark. The Group’s net sales for 2020 was 151.3 MEUR. Enento Group is listed on Nasdaq Helsinki with the trading code ENENTO.

Attachment

• Enento Group Plc_Interim Report Q3_2021

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