DIGITALIST GROUP PLC Stock Exchange Release 28.4.2023 at 9:00
Digitalist Group Plc’s Business Review, 1 January – 31 March 2023
January–March 2023 (comparable figures for 2022 in parentheses):
Turnover: EUR 4,6 million (EUR 5,1 million), decrease of 10,5%.
EBITDA: EUR -0,3 million (EUR -0,5 million), -7,2% of turnover (-9,9%).
EBIT: EUR -0,6 million (EUR -1,0 million), -12,1% of turnover (-18,6%).
Net income: EUR -0,9 million (EUR -1,1 million),-18,6% of turnover (-21,6%).
Earnings per share (diluted and undiluted): EUR -0,00 (EUR -0,00).
Number of employees at the end of the review period: 143 (161), reduction of 11%.
CEO’s review
As a result of the tighter market conditions the turnover has decreased by 11 % compared to the same period last year. However, at the same time we have improved the EBITDA as part of the turnover as well as in absolute numbers. Our cost saving initiatives have reduced the operational cost structure by EUR 0.5 million compared to the first quarter in the previous year.
Our business in the public sector is strong and continues to grow, while parts of the private sector see lower budgets and increased competition for the contracts. We have attracted new clients like Digg (Agency for Digital Government) and Svenska Kraftnät in Sweden and City of Vancouver's public transportation company Translink in Canada.
During the first quarter we completed the acquisition of Walker & Handson Oy to strengthen the management and tech and design business in Digitalist Finland Oy. The acquisition is believed to significantly improve Digitalist Finland Oy’s future growth opportunities in Finland.
We are still very focused on improving the profitability of the group and we work closely in all group companies to ensure the best potential to run a successful business. We invest in potential growth areas but at the same time we constantly look for further savings and adjustments to the market conditions.
We are not yet satisfied with the result, but we feel that we are moving in the right direction and that the measures we are taking are leading to positive results.
CEO Magnus Leijonborg
FUTURE PROSPECTS
In 2023, turnover and EBITDA are expected to improve in comparison with 2022.
Continuation agreement on the delivery of design and development services to a Swedish public sector operator 2.1.2023 Digitalist Group Plc’s (Digitalist Group or Company) Swedish subsidiary Digitalist Sweden AB has concluded a continuation agreement with a Swedish public sector operator on the delivery of design and development services. The agreement is part of long-term cooperation and its value is approximately EUR 1.8 million. The delivery of the services is planned to take place during 2023. The agreement supports Digitalist Group’s growth in Sweden and its target to act as a strategic partner in digitalisation.
Digitalist Group strengthens its Finnish subsidiary through an acquisition 23.2.2023 Digitalist Group Plc (“Digitalist Group”) and its fully-owned subsidiary Digitalist Finland Oy signed a final agreement on a transaction (“Transaction”) in which Digitalist Finland Oy acquires Walker & Handson Oy (“W&H”) to strengthen the management and tech & design business in Digitalist Finland Oy. Digitalist Group informed about the letter of intent on the matter on 28.1.2023. In the Transaction Digitalist Finland Oy acquired all shares in W&H through share exchange by issuing new Digitalist Finland Oy’s shares in a direct share issue to W&H representing approximately 10 % of all shares in Digitalist Finland Oy after completion of the Transaction. With the Transaction the owner of W&H Jussi Hermunen was nominated as the Managing Director of Digitalist Finland Oy as of 1.2.2023.
At the beginning of 2023, the company agreed with the financing bank to increase the financing limit by 0.7 million euros. In February, Business Finland made a decision not to collect on the 0.3 million euro portion of the product development loan.
EVENTS SINCE THE REVIEW PERIOD
The company held its Annual General Meeting on 26 April 2023. The minutes of the Annual General Meeting and the decisions made are available on the company’s website at: https://investor.digitalistgroup.com/fi/investor/releases
The Annual General Meeting elected Paul Ehrnrooth, Andreas Rosenlew, Esa Matikainen, Peter Eriksson, Maria Olofsson and Johan Almquist as ordinary members of the Board. Audit firm KPMG Oy Ab was appointed as the company’s auditor, with KHT auditor Miika Karkulahti as the principal auditor.
The Annual General Meeting authorized the Board to decide on a paid share issue and on granting option rights and other special rights entitling to shares as set out in Chapter 10 Section 1 of the Finnish Limited Liability Companies Act or on the combination of all or some of the aforementioned instruments in one or more tranches. The total number of shares in the company’s possession and the new shares to be issued under the authorisation may not exceed 341,211,370, which corresponds to 50 per cent of all company shares at the time of convening the Annual General Meeting.
The Annual General Meeting authorized the Board to decide on acquiring or accepting as pledge, using the company’s distributable assets, a maximum of 68,242,000 own shares, which corresponds to around 10 per cent of the company’s total shares at the time of convening the meeting. The acquisition may take place in one or more tranches. The acquisition price will not exceed the highest market price of the share in public trading at the time of the acquisition.
The authorizations to the Board will be in effect until the Annual General Meeting held in 2024, yet no further than until 30 June 2024.
The Annual General meeting resolved to amend “Article 8 Notice of General Meeting” of the Articles of Association so that the meeting place is included in the title and the regulations concerning the meeting place and holding a remote meeting are added to the second paragraph. After the amendments, the Article 8 of the Articles of Association reads as follows:
“8 § Notice of General Meeting and meeting place The notice of the General Meeting shall be published on the company's website no earlier than three (3) months and no later than three (3) weeks before the General Meeting, however, always at least nine (9) days before the record date of the General Meeting. In order to be entitled to participate in the General Meeting, a shareholder must register with the company no later than on the date set by the Board of Directors, which can be no earlier than ten (10) days before the meeting.
The General Meeting is held at the company's domicile. The Board of Directors may also resolve that the General Meeting is organized without a meeting place, so that the shareholders will use their full decision-making power in real time with the help of a data connection and a technical aid during the meeting.”
In its organizing meeting, the Board of Directors of Digitalist Group Plc resolved to elect Esa Matikainen as the chairman of the Board of Directors and Andreas Rosenlew as the vice chairman of the Board of Directors. The Board also resolved to elect Esa Matikainen as chairman of the Audit Committee and Peter Eriksson and Maria Olofsson as members of the Audit Committee.
Digitalist Group signed an agreement on development services to Digg, Agency for Digital Government in Sweden Digitalist Group Plc announced on 19.4.2023, that it’s Swedish subsidiary Digitalist Sweden AB has won a procurement process to become a new supplier for Digg, Agency for Digital Government in Sweden. The assignment concerns management and new development of dataportal.se, Sweden’s national data portal. The agreement is valid for 4 years and has a budget frame upto SEK 60 million, (approximately EUR 5.3 million) for the period. The agreement supports Digitalist Group’s growth in Sweden and its target to act as a strategic partner in digitalisation.
When the business review was published, the company expected its working capital to be sufficient to cover its requirements over the next 12 months.
DIGITALIST GROUP OYJ Board of Directors
Additional information: Digitalist Group Plc CEO Magnus Leijonborg, tel. +46 76 315 8422, magnus.leijonborg@digitalistgroup.com
Distribution: Nasdaq Helsinki Ltd Major media https://digitalist.global
