Enento Group’s Interim Report 1.1. – 31.3.2022: Growth in a challenging market environment

ENENTO GROUP PLC, STOCK EXCHANGE RELEASE 28 APRIL 2022 AT 12.30 EEST

Enento Group’s Interim Report1.1. – 31.3.2022:Growth in a challenging market environment

SUMMARY

January - March 2022 in brief

• Net sales amounted to EUR 40,7 million (EUR 39,7 million), an increase of 2,6 % (at comparable exchange rates an increase of 4,4 %).
• Adjusted EBITDA excluding items affecting comparability was EUR 13,5 million (EUR 13,9 million), a decrease of 2,9 % (at comparable exchange rates decrease of 1,3 %).
• Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to acquisitions was EUR 9,5 million (EUR 11,5 million), a decrease of 17,8 %. Adjusted EBIT includes an impairment and reversal of work-in-progress of EUR 1,6 million relating to Tambur service due to future transfer of the service.Operating profit (EBIT) was EUR 6,1 million (EUR 8,5 million). Operating profit included amortisation from fair value adjustments of EUR 3,1 million (EUR 3,2 million) related to acquisitions and EUR 0,3 million (EUR -0,1 million) items affecting comparability mainly arising from redundancy related costs and integration costs. Operating profit includes to the above mentioned impairment of Tambur service.
• New services represented 5,9 % (6,9 %) of net sales.
• Free cash flow amounted to EUR 7,1 million (EUR 5,7 million). The effect of items affecting comparability on free cash flow was EUR 0,1 million (EUR -0,0 million).
• Earnings per share was EUR 0,18 (EUR 0,27).
• Comparable earnings per share were EUR 0,28 (EUR 0,37)¹.
• In Sweden bank consortium is exercising the option to acquire the Tambur- service, estimated to take place in 2023

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

KEY FIGURES

	1.1. –	1.1. –	1.1. –
EUR million	31.3.2022	31.3.2021	31.12.2021
Net sales	40,7	39,7	163,5
Net sales growth, % (comparable fx rates)	4,4	2,4	5,9
Net sales growth, % (reported fx rates)	2,6	5,4	8,1
Operating profit (EBIT)	6,1	8,5	35,2
EBIT margin, %	14,9	21,3	21,6
Adjusted EBITDA	13,5	13,9	59,1
Adjusted EBITDA margin, %	33,3	35,2	36,2
Adjusted operating profit (EBIT)	9,5	11,5	49,0
Adjusted EBIT margin, %	23,3	29,0	30,0
New services of net sales, %	5,9	6,9	7,3
Free cash flow	7,1	5,7	29,8
Net debt to adjusted EBITDA, x	2,3	2,5	2,4

REVISED FUTURE OUTLOOK

The general macroeconomic risks are increasing due to the war in Ukraine as well as continued uncertainty from the pandemic. These developments may have a negative impact on the demand of our services. However, the increased market demand for Enento Group’s services is expected to continue. This, combined with introduction of new services are expected to support growth in 2022. However, the volatility of Swedish Krona can cause uncertainty in relation to growth outlook and may impact the net sales growth with reported exchange rates in 2022.

Enento Group expects that the platform transformation–related costs will continue to impact the results in 2022.

REVISED GUIDANCE

Net Sales: Enento Group expects its net sales growth in 2022 at comparable exchange rates to be around the lower end of the long-term target range (5-10 %).

EBITDA: Enento Group expects its adjusted EBITDA margin at comparable exchange rates to improve somewhat in 2022 compared to previous year.

Comparable exchange rates mean that the effects of any changes in currencies are eliminated by calculating the figures for the previous period using current period’s exchange rates.

Prior Future Outlook

The general macroeconomic environment and the pandemic are persisting uncertainties. However, the increased market demand for Enento Group’s services is expected to continue. This, combined with introduction of new services are expected to support growth in 2022. However, the recent weakening of Swedish Krona cause uncertainty in relation to growth outlook and may impact the net sales growth with reported exchange rates in 2022.

Enento group expects that the platform transformation–related costs will continue to impact the results in 2022

Prior Guidance

Net Sales: Enento Group expects its net sales growth in 2022 at comparable exchange rates to be toward the lower end of the long-term target range (5-10 %).

EBITDA: Enento Group expects its adjusted EBITDA margin at comparable exchange rates to improve somewhat in 2022 compared to previous year.

Comparable exchange rates mean that the effects of any changes in currencies are eliminated by calculating the figures for the previous period using current period’s exchange rates.

JEANETTE JÄGER, CEO

This was my first quarter in the Enento Group and it was a quarter where we experienced a new COVID-19 wave and the war in Ukraine. As for any new CEO this first phase is very much about getting a view of what do we do well and what can we continue to improve in dialougues with customers, employees, partners and investors. My conclusion from the first quarter is that our management team and our employees are motivated and committed and have a good understanding of both our customer needs and our services. Our aim is to deliver a superior customer experience and I’m convinced that a truly customer-centric mindset within Enento will lead to even more loyal customers and further growth.

Now in Q1 2022 our NPS level on the company customers continue to be high and our consumer customers NPS levels has increased significantly. We have a structured approach by using both a technical and an organizational set up for a cross Nordic CX (customer experience) program. We are taking big steps from insights to concrete actions with the purpose to create a superior customer experience.

Despite the challenging market situation, Enento Group’s net sales in the first quarter increased by 4,4% (2,6 at reported exchange rates) and totalled 40,7 million euros. Adjusted EBITDA decreased by 1,3% (2,9% at reported exchange rates) to 13,5 million euros. The Group's adjusted EBITdecreased by 16,4 % (17,8% at reported exchange rates) to 9,5 million euros. The decline in profitability was mainly due to the impairment of development expenses for the Tambur service platform used in Swedish housing transaction processes. New services was 5,9% of the net sales.

The net sales of the Consumer Insight Business Area were affected by the strong demand for consumer information services in the Finnish and Swedish markets. The net sales of the real estate and collateral information services in the Digital Processes Business Area were at the previous year's level, but demand for the Business Area's compliance services increased significantly due to sanctions imposed as a result of Russia's attack to Ukraine. The net sales of the Business Insight Business Area in the Finnish market decreased year-on-year and this is still affected by the low demand for risk management services. Enento have offered ESG report on the Finnish market since 2017. In March this quarter, the Business Insight Business Area launched the first ESG report also in Sweden. We strongly believe that sustainability offering presents a truly Nordic growth opportunity for Enento Group. 

Enento has successfully managed and developed the Tambur service platform, introduced in 2018 and used since then by Swedish banks and real estate brokers in housing transaction processes. Banks have been satisfied with the service that handles most of the housing transactions in the Swedish market. As previously announced, based on our cooperation agreement, the banks have now reached a decision to transfer the Tambur platform to be jointly owned by the banks. Enento will continue to provide services based on the housing transaction service platform until the final handover date in 2023, but conditions related to the transition period are still being negotiated.

The development of the Nordic business platform is progressing, and we have just launched the new Swedish ESG-report, on top of this new platform. We continue to see platform development to be key to operate and develop services more efficiently, but we also see a need to develop our plans and priorities in this area to secure succesful long-term margin improvements. We continue to see both short- and long-term benefits of building and operating a Nordic futureproof platform.

There are and there will be general uncertainties in the global economy, but so far, our business has adapted fairly well to the diverse effects of the exceptional circumstances. However, the war in Ukraine may also impact negatively macroeconomic development in the Nordics through lower economic growth, confidence and activity levels and thus indirectly impact demand of our services. Despite the uncertainties, I am convinced that we have significant potential to further develop the Nordic Enento so that we can provide a consistent and high-quality customer experience in all our markets and a sustainable return for our shareholders.

NEWS CONFERENCE: WEBCAST AND CONFERENCE CALL

Enento Group will hold a webcast and conference call for analysts, investors and media in English on Thursady, 28 April 2022 at 3.00 p.m. EEST where CEO Jeanette Jäger and CFO Elina Stråhlman will present the performance and events of the first quarter 2022.

You can follow the English webcast and conference call at:
https://cloud.webcast.fi/enento/2022-04-28-enento-q1

To participate in the conference call, please dial in using one of the numbers below:
Finland: +358 (0)9 7479 0572
Sweden: +46 (0)8 5664 2754
United Kingdom: +44 (0)330 165 3641
United States, LA: +1 323-701-0170
United States, NY: +1 323-701-0170
The conference ID code: 962521

The presentation material will be available on the company’s investor website at 2.30 p.m. EEST and a recording of the webcast later during the day.

Helsinki, 28 April 2022

ENENTO GROUP PLC
Board of Directors

For further information:
Jeanette Jäger
CEO
Enento Group Plc
Tel. +46 72 141 00 00

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 432 people are working for Enento Group in Finland, Norway, Sweden and Denmark. The Group’s net sales for 2021 was 163.5 MEUR. Enento Group is listed on Nasdaq Helsinki with the trading code ENENTO.

Attachment

• Enento Group Plc_Interim Report_Q1_2022

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