Innofactor - A weaker quarter
Innofactor’s Q2 results fell below our expectations both due to a minor net sales decline and one-off legal expenses. Net sales declined ~1% y/y to EUR 19.9m (Evli EUR 20.9m) while EBITDA amounted to EUR 0.6m (Evli EUR 2.1m). EBITDA included legal expenses of EUR 0.75m, without which EBITDA would have been EUR 1.4m (~7% of net sales).
- Net sales in Q2 amounted to EUR 19.9m (EUR 20.1m in Q2/23), below our estimates (Evli EUR 20.9m). Net sales in Q2 declined 1.1%. Net sales increased in Finland and Norway but decreased in Sweden and Denmark.
- EBITDA in Q2 was EUR 0.6m (EUR 1.8m in Q2/23), clearly below our estimates (Evli EUR 2.1m), at a margin of 3.0%.
- Operating profit in Q2 amounted to EUR -0.1m (EUR 1.0m in Q2/23, clearly below our estimates (Evli EUR 1.3m), at a margin of -0.7%.
- EBITDA was positive in Finland and Norway in Q2 but negative in the other countries. Innofactor booked EUR 0.75m in legal expenses due to arbitration proceedings relating to the Lumagate acquisition.
- The market situation remained difficult and new sales were challenging also during Q2. The order backlog declined by 8.9% y/y to EUR 70.4m, however, growing 2.2% q/q. Innofactor’s invoicing rate fell short of targets due to the demand situation. Innofactor has adapted operations by reduced use of subcontracting and also through a reduction of the number of personnel in Sweden by some 20 percent, causing additional expenses during Q2.
- Guidance for 2024 (reiterated): Innofactor’s net sales is expected to increase from 2023 (EUR 80.3m) and EBITDA is expected to increase from 2023 (EUR 9.1m).