Solteq Plc’s Interim Report January 1 – March 31, 2023

Stock Exchange Bulletin
Interim Report
May 4, 2023, at 8.00 am

A two-parted quarter – Continued problems with Utilities, Retail & Commerce toward a better direction

January–March

• Revenue totaled EUR 16.9 million (19.2) and decreased by 12.2 percent
• EBITDA was EUR 1.3 million (2.7) and EBITDA percent was 7.6 (14.1)
• Operating result was EUR -0.1 million (1.4) and operating result percent was -0.5 (7.2)
• Earnings per share was EUR 0.01 (0.04)
• Solteq Group’s equity ratio was 30.5 percent (35.7)
• Net cash flow from operating activities was EUR 0.5 million (2.1)
• Solteq’s revenue is expected to be EUR 60–62 million and operating result to be slightly negative excluding the one-time profit recognition of EUR 8 million on the sale of the Group’s ERP business based on Microsoft BC and LS Retail solutions

Key figures

 

	1-3/2023	1-3/2022	Change %	1-12/2022	Rolling 12mos
Revenue, TEUR	16,899	19,239	-12.2	68,426	66,087
EBITDA, TEUR	1,281	2,720	-52.9	5,555	4,115
Comparable EBITDA, TEUR	1,434	2,922	-50.9	6,400	4,912
Operating result, TEUR	-91	1,384	-106.6	-4,406	-5,881
Comparable operating result, TEUR	62	1,586	-96.1	888	-636
Result for the financial period, TEUR	204	795	-74.3	-5,404	-5,995
Earnings per share, EUR	0.01	0.04	-74.3	-0.28	-0.31
Operating result, %	-0.5	7.2		-6.4	-8.9
Comparable operating result, %	0.4	8.2		1.3	-1.0
Equity ratio, %	30.5	35.7		30.3	33.2

 

CEO Aarne Aktan: A two-parted quarter – Continued problems with Utilities, Retail & Commerce toward a better direction 

Solteq Plc's first quarter was moderate and profitability development was better than we expected. The Group's revenue was EUR 16.9 million, EBITDA EUR 1.3 million, and comparable operating result EUR 0.1 million. The Group's revenue decreased by 12.2 percent from the comparison period partly due to the general decline in demand and, especially, to the continued quality problems in the Utilities business.

Profitability decreased from the comparison period in both segments. The Retail & Commerce segment was able to balance the challenging market situation with successful sales and improved efficiency. The Utilities segment continued to focus on solving problems in the development and quality of software products, which reduced customer invoicing and increased project delivery costs.

However, the segment's problems have decreased compared to the second half of last year. Persistent work to solve the problems is still ongoing, but we believe that the segment’s situation will be clearly improved after the summer.

The instability in international politics creates uncertainties in the Nordic operating environment, for example, in the form of high inflation and increased costs. The uncertainties still have a negative impact on demand for the Retail & Commerce segment, although the continued decline in demand seen in the second half of last year, has calmed down. In the Nordic energy sector, demand for software solutions and expert services is driven by changes in industry regulations, the transition to renewable energy sources, and opportunities created by emerging technologies for business efficiency.

We expect the market outlook for the Retail & Commerce segment to remain moderate during the current financial year and demand to recover as the market stabilizes. We expect the long-term market outlook for the Utilities to remain good and provide opportunities for profitable growth.

After the review period, on April 17, 2023, the company sold its business based on Microsoft BC and LS Retail ERP systems to Azets Insight Oy. The net debt-free purchase price is a maximum of EUR 20 million. The company will recognize an estimated one-time profit of approximately EUR 8 million on the fixed purchase price in the second quarter. As a result of the transaction, the company focuses more strongly on selected solutions and expert services in the energy sector, retail, and e-commerce. The transaction will significantly reduce the company's indebtedness and thus improve its operating possibilities in both business segments.
 

Profit Guidance 2023 (updated on May 3, 2023)

Solteq’s revenue is expected to be EUR 60–62 million and operating result to be slightly negative excluding the one-time profit recognition of EUR 8 million on the sale of the Group’s ERP business based on Microsoft BC and LS Retail solutions.
 

Attachments

Solteq Plc’s Interim Report January 1 – March 31, 2023

 

Further Information
CEO Aarne Aktan
Tel: +358 40 342 4440
E-mail: [email protected]

CFO Kari Lehtosalo
Tel: +358 40 701 0338
E-mail: [email protected]

 

Distribution

NASDAQ Helsinki
Key media
www.solteq.com

 

Solteq in brief

Solteq is a Nordic software solution and expert service provider specializing in retail and energy sectors and needs related to e-commerce. The company employs over 550 professionals and has offices in Finland, Sweden, Norway, Denmark, Poland, and the UK.