Digital Workforce Services Plc, Half Year Financial Report 2022 (unaudited)
Company announcement, August 18, 2022 at 8:00 a.m. EEST
This release is a summary of Digital Workforce Services Plc’s Half-Year Report January-June 2022. The complete report is attached to this release as a PDF file, and it is also available on the company’s website at digitalworkforce.com/investors
Unless otherwise stated, the comparison figures provided in parentheses refer to the corresponding period of the previous year.
SHARE OF CONTINUOUS SERVICES’ REVENUE INCREASED TO 60 PERCENT
Acceleration of profitability goals
January-June 2022
- Group’s revenue was EUR 12.0 (11.1) million and increased 8%.
- Revenue of Continuous Services was EUR 1 (5.6) million. Growth was 28% and the share of revenue grew to 60%.
- Revenue of Professional Services was EUR 8 (5.4) million. Decrease was 11% and the share of revenue was 40% (49%).
- Gross profit was EUR 2 (4.0) million.
- EBITDA was EUR -1.6 (-0.3) million and adjusted EBITDA EUR -1.3 (-0.3) million.
- The EBIT was EUR -1.7 (-0.4)
- At the end of the review period, cash and bank receivables and other liquid assets were at EUR 15.9 million.
- Earnings per share (EPS) was EUR -0.17.
- The company updated its strategy – new Digital Workforce Outsmart to accelerate business growth.
- The company announced its partnership with Flowable to develop Outsmart Platform.
- Business Finland awarded a grant of EUR 1.37 million for research and development to further develop Outsmart Platform for the period March 4, 2022 – February 28, 2023.
- Several deals with organizations in national health care (NHS) in the UK.
- New Roboshore managed service deals across various industries in the United States.
Key figures
| EUR 1,000 | 1-6/2022 | 1-6/2021 | Change % | 2021 |
| Revenue | 11967 | 11083 | 8.0% | 22362 |
| Sales margin | 4223 | 3996 | 5.7% | 7926 |
| % of net sales | 35.3% | 36.1% | 35.4% | |
| EBITDA | -1606 | -272 | 490.0% | -956 |
| % of net sales | -13.4% | -2.5% | -4.3% | |
| Adjusted EBITDA* | -1342 | -272 | 393.0% | -585 |
| % of net sales | -11.2% | -2.5% | -2.6% | |
| EBIT | -1722 | -410 | 320.1% | -1219 |
| % of net sales | -14.4% | -3.7% | -5.5% | |
| Profit/loss for the review period | -1883 | -564 | 233.7% | -3578 |
| Gearing ratio, % ** | -88.7% | n/a | -99.8% | |
| Equity ratio, % ** | 61.9% | n/a | 69.0% | |
| Number of employees at the end of the period | 196 | 190 | 181 | |
| Average number of employees | 188 | 191 | 191 | |
| Earnings per share, EUR | -0.17 | -1.13 | -0.62 | |
| * The EBITDA adjustment for 1-6/2022 is formed by the IT system project and corporate restructuring costs. In 2021, the adjustment was formed by costs related to listing. | ||||
| ** Equity was negative on June 30, 2021, which is why it is not purposeful to present certain key figures. |
CEO Mika Vainio-Mattila:
“Our company became listed in December 2021, and our first six months as a listed company ended in a changed financial and market situation and extraordinary geopolitical conditions. We are now faced with financial uncertainty and the possibility of recession.
The company’s revenue increased by 8%, which is not satisfactory. The growth has been hampered by the postponement of investment decisions due to the uncertain market prospects and financial situation, especially in the Nordic countries. Our sales margin in euros increased from the previous year, but our EBITDA decreased due to additional operational investments. These included strategic investments in growing international business and system updates to support growth. Moreover, the accelerating inflation increased our personnel expenses as well as other costs indirectly.
In these challenging conditions, we were able to continue the strong growth of our continuously invoiced services in accordance with our strategy, and these services amounted to 60% of our revenue at the end of the review period. The continuously invoiced services include the intelligent automation cloud and maintenance services, which can be expanded according to customer needs. The growth is an indication of our customers’ need for automating business processes and their trust in our services that can be deployed quickly and easily. Some large Professional Services projects ended in 2021, and our satisfied customers extended them with us in the form of continuously invoiced services. As regards software robotics projects, the Finnish markets are maturing and transitioning toward comprehensive automation deliveries, which has resulted in a decrease in Professional Services business.
In the United Kingdom, several trades were made with public health organizations (National Health Service, NHS). The health sector has turned out to be an essential area for expansion, and we have managed to secure a firm foothold. In the United States, we made numerous continuously invoiced platform and maintenance services with medium-sized companies in many different sectors, including transport, insurance, outsourcing and consulting. After the review period, we closed a contract extension worth EUR 1.5 million with one of our customers, which is among the largest energy companies in the country. In the United Kingdom and the United States, we have succeeded in recruiting key personnel, and we are continuing growth investments in these markets.
After the review period, we acquired the Irish company Eclair Group Limited, which will enable us to enter the continuous service market in Ireland. The corporate acquisition also expands our international customer base in the financial and health care sectors and strengthens our foothold in the economic areas of Ireland and the UK.
We were selected through a public competitive bidding process to provide a comprehensive software robotics solution for Keva (former municipal pension insurance organization). This strengthens our position in the Finnish banking and insurance sectors.
We reacted to the change in market situation and updated our strategy in the spring. Going forward, digitalization will be related to all work being conducted, and the automation benefits sought by companies have expanded from increasing the efficiency of individual routine tasks to comprehensively automating business processes to accelerate digitalization, increase revenue, improve the customer experience and boost competitiveness.
We are building a comprehensive Outsmart automation platform for business activities, which will enable increasing our market share and expedite growth in new market areas. In the development efforts, we utilize the best technologies in the field. We have also made a partnership deal with the Swiss company Flowable. Business Finland provided us with a MEUR 1.37 grant for research and development, which we will use to create new capabilities for the Outsmart platform to enable businesses to automate business processes in a comprehensive manner. The Outsmart platform has demand on the markets, and we are currently negotiating with dozens of customers. We have also signed our first contracts. We will be supplying solutions utilizing the Outsmart platform starting from the third quarter of 2022.
In the changed market situation, our aim is to anticipate any possible market regression. We have also examined our operations and cost structure. We have started efficiency measures in the Nordic countries and are speeding up the achievement of the company’s profitability goals. We expect moderate growth in the Nordic countries. We will be continuing our growth investments in the United Kingdom and the United States. We believe that the Outsmart platform will provide revenue in the United States, particularly in the medium-sized companies market, in which the customer potential is ten times that of the large companies’ market.
In summary, our company’s development outlook is good, and our listing provided us with cash assets to grow the business on an international scale. We also received a grant from Business Finland to develop the unique Outsmart solution. We have made significant deals in the United States and United Kingdom, among other markets. I believe that we can continue our growth as a leading company in the field.”
Webcast news conference for investors and media
Digital Workforce Services will hold a news conference on the Half Year financial results as a live webcast on Thursday, August 18, 2022, at 10.00 a.m. Finnish time (EEST). During the webcast all questions should be presented in English. CEO Mika Vainio-Mattila will be presenting at the event. A recording of the webcast will be available at the same address during the same day.
Registration to the webcast is requested beforehand at https://digitalworkforce.videosync.fi/2022-half-year-report
Helsinki, August 18, 2022
Board of Directors
Digital Workforce Services Plc
More information: Mika Vainio-Mattila, CEO, tel. +358 40 752 0617
mika.vainio-mattila@digitalworkforce.com
Certified financial supervisor: Danske Bank, tel. +358 40 841 3052
About Digital Workforce Services
Digital Workforce Services Plc is the leading business automation platform and service provider globally. Digital Workforce Outsmart platform allows organizations to accelerate digitalization, increase revenue, improve customer experience and gain competitive advantage. Globally, over 200 large customers use Digital Workforce’s platform and services to transform their businesses with automation. Founded in 2015, Digital Workforce currently employs over 200 business automation specialists in the US, the UK, Poland, Germany, Finland, Sweden, Norway, and Denmark. Digital Workforce is publicly listed in Nasdaq First North Growth Market Finland.