Gofore Plc’s Half-year Report January-June 2024: Q2 adjusted EBITA 12.7%, up from previous year

Gofore Plc
Half-year Report 
15 August 2024 at 8.45 a.m. EET
 

Gofore Plc’s Half-year Report January-June 2024: Q2 adjusted EBITA 12.7%, up from previous year 

April-June 2024

• Profitability improved compared to comparison period. Adjusted EBITA 6.1 (5.4) million euros, 12.7% (11.3%).
• Net sales grew by 0.9% despite lower demand, were 48.0 (47.6) million euros. Organic growth -3.1%.
• Utilisation rate improved slowly but trend-like during the quarter.
• April-June had one more working day than in 2023. 
• Price competition exceptionally made customer prices drop, -1.0%, average salary +0.1%.
• Number of employees grew to a total of 1,453 (1,396) people.  Overall capacity standing at 1,511 (1,489).

January-June 2024 

• Net sales grew by 0.5% and were 97.2 (96.7) million euros.
• Adjusted EBITA 12.9 (13.7) million euros, 13.2% (14.2%) of net sales.
• Customer prices dropped, -0.1%, average salary development standing at +0.8%. 

The half-year report is attached to this release and can be found on Gofore’s IR website at https://gofore.com/en/invest/. The report includes e.g. the most significant new agreements, an extensive key figure table, profit and loss statement and balance sheet, as well as Gofore’s market outlook and near-term risks. This is an IAS34 compliant interim report. The numbers are unaudited.  

Key figures 

Group Key Figures Summary, MEUR	Q2/2024	Q2/2023	H1/2024	H1/2023	2023
Net sales	48.0	47.6	97.2	96.7	189.2
Organic growth of net sales, %	-3.1%	22.0%	-2.5%	27.1%	22.0%
Adjusted EBITA	6.1	5.4	12.9	13.7	26.7
Adjusted EBITA, %	12.7%	11.3%	13.2%	14.2%	14.1%
EBITA	6.1	5.4	12.9	13.5	27.1
Operating Profit (EBIT)	5.2	4.5	11.0	11.6	23.0
Earnings per share (EPS), undiluted	0.25	0.21	0.53	0.56	1.15
Earnings per share (EPS), diluted	0.25	0.21	0.53	0.56	1.15
Number of employees at end of period	1,453	1,396	1,453	1,396	1,465
Overall capacity; in-house and subcontracted staff (FTE), at end of period	1,511	1,489	1,511	1,489	1,529

CEO Mikael Nylund: 

“Gofore’s profitability improved in the second quarter compared to that of previous year’s, and adjusted EBITA was 12.7%. Our net sales were 48 million euros, which means we did not manage to grow this time, but instead remained in the previous year’s level with organic growth slightly on the negative side.

The challenging period that is driven by the overall weak economy and has lasted for over a year has taught us how to live with new circumstances. Our strategic cornerstones, our idea of deep partnerships with customers and a comprehensive digital transformation service offering, continue to work for us. We have also learned to control our operative efficiency, especially utilisation rates, in a situation where customer projects include continuous changes and more change than before. Our profitability target has not enabled entering the toughest price competition, which has partly hampered our growth. We believe this to be the right choice for our long term success. 

Customer demand picked up in the second quarter. This spring, more public sector tenders were started than in the beginning of the year. We especially saw a variety of frame agreement type of tenders on expert services in the social and wellbeing service area. In the private sector, some customers have continued to condense their supplier networks and increased control over price levels, as they have done since the beginning of the year. Industrial sector customers’ situations were varied and quite customer-specific. Some industrial customers managed to improve their performance, while others are still in a demand low point caused by global markets.  Overall demand for Gofore’s services developed positively.

At the same time, we continued to see negative impacts of customers’ savings decisions. Some customers continued to shut or cut down projects.  As we see it, this does not mean that digital development is slowing down. On one hand, this accumulates need. On the other, customers are almost forced to renew their development portfolios. Old projects that are not mission critical in the current situation are weeded out, making room for new investments that make more business sense. We consider this change healthy, and also one that makes sure Gofore’s business is on a sustainable foundation as customers invest in the most important areas. Digital technology development, such as the current AI revolution, continuously creates new opportunities.

Operatively, the second quarter proceeded as expected. Project turnover presented challenges to our utilisation rates. Although we continue to lag behind our targets, we managed to continue the positive trend that has carried on throughout the calendar year, even considering the seasonality of the summer. On the other hand, the competitive situation has continued tight, which can be seen in customer price development. Second quarter saw customer prices decline by 1% for the first time in a long time. 

The general economic situation has continued weak against earlier expectations.  This has partly slowed down the improvement of customer demand. However, we base our strategy on the growth potential of investments alongside the economy. Gofore has proven to be able and hungry to seize a growing market and to continue profitable growth.

Pioneer-like innovation of unique, value adding digital solutions of concepts builds our competitive edge also for the future. There is more information in this report on a growth engine programme called Forward’27 where we join our long-term customer Ponsse and develop a related concept for our Intelligent Industry clientele. 

Gofore has for long carried out its strategy planning in a two-year cycle. According to the same cycle, our strategy update will also this year take place at the end of this year. We want to grab opportunities in a quickly changing world while strengthening our existing strengths further.”

Monthly net sales development in 2024 

The numbers are unaudited. 

Month	Net sales, MEUR	LTM pro forma net sales	No. of employees at end of period	No. of working days in Finland	Overall capacity FTE	Subcontracting FTE
January	16.9 (15.8)	193.3	1,463 (1,318)	22 (21)	1,372 (1,225)	147 (186)
February	16.3 (15.3)	193.7	1,461 (1,342)	21 (20)	1,372 (1,256)	149 (184)
March	16.0 (18.1)	191.3	1,456 (1,354)	20 (23)	1,371 (1,271)	160 (189)
April	17.0 (14.5)	193.1	1,456 (1,385)	21 (18)	1,372 (1,293)	155 (187)
May	16.8 (17.2)	192.3	1,455 (1,400)	21 (21)	1,369 (1,311)	159 (192)
June	14.2 (15.9)	189.7	1,453 (1,396)	19 (21)	1,368 (1,319)	143 (170)

 Next financial disclosure 

Gofore’s next financial disclosure will be the Q3 Interim Report on 24 October 2024. Gofore also publishes business reviews for the months that are not included in interim reports or the half-year report, in the beginning of the month following the month reported. July and August 2024 numbers will be released in the beginning of September.