Asiakastieto Group Oyj: Asiakastieto Group's Half Year Report 1.1. - 30.6.2019: Continued Nordic growth

ASIAKASTIETO GROUP PLC, STOCK EXCHANGE RELEASE 8 AUGUST 2019 AT 11.00 EEST

Asiakastieto Group's Half Year Report 1.1. - 30.6.2019: Continued Nordic growth

SUMMARY

Asiakastieto Group Plc acquired on 29 June 2018 the shares in UC AB. As a result of the acquisition, UC AB's consolidated balance sheet has been consolidated as part of Asiakastieto Group Plc's consolidated balance sheet from 30 June 2018 and UC AB's consolidated income statement as part of Asiakastieto Group Plc's consolidated income statement from 1 July 2018. In this half year report, the reported figures for the review time 1 January-30 June do not include UC AB's figures.

The figures presented in this half year report are unaudited.

April - June 2019 in brief

• Net sales amounted to EUR 35,6 million (EUR 15,7 million), an increase of 126,1 %.
• Adjusted EBITDA excluding items affecting comparability was EUR 12,2 million (EUR 6,6 million), an increase of 84,8 %.
• Adjusted EBITDA excluding IFRS 16 impact was EUR 11,7 million (EUR 6,6 million), an increase of 76,5 %.
• Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to the acquisitions was EUR 9,2 million (EUR 5,7 million), an increase of 59,5 %.
• Operating profit (EBIT) was EUR 5,0 million (EUR 1,0 million). Operating profit included items affecting comparability of EUR 4,1 million (EUR 4,8 million), mainly arising from amortisation from fair value adjustments of EUR 2,7 million (EUR 0,1 million) related to acquisitions, M&A expenses and redundancy-related expenses associated with the restructuring of operations.
• UC KYC service was closed down in Sweden. The effect of closing down the service was EUR -0,3 million on adjusted EBITDA and EUR -1,5 million on adjusted EBIT.
• New products and services represented 4,0 % (10,5 %) of net sales.
• Free cash flow amounted to EUR 5,3 million (EUR 2,4 million). The effect of items affecting comparability on free cash flow was EUR -0,5 million (EUR -1,7 million).
• Earnings per share were EUR 0,15 (EUR -0,00).
• Comparable earnings per share were EUR 0,24 (EUR 0,00)¹.

January - June 2019 in brief

• Net sales amounted to EUR 70,1 million (EUR 30,8 million), an increase of 127,4 %.
• Adjusted EBITDA excluding items affecting comparability was EUR 24,0 million (EUR 13,0 million), an increase of 83,8 %.
• Adjusted EBITDA excluding IFRS 16 impact was EUR 22,9 million (EUR 13,0 million), an increase of 75,4 %.
• Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to the acquisitions was EUR 19,0 million (EUR 11,4 million), an increase of 67,2 %.
• Operating profit (EBIT) was EUR 11,7 million (EUR 5,2 million). Operating profit included items affecting comparability of EUR 7,3 million (EUR 6,2 million), mainly arising from amortisation from fair value adjustments of EUR 5,5 million (EUR 0,2 million) related to acquisitions, M&A expenses and redundancy-related expenses associated with the restructuring of operations.
• UC KYC service was closed down in Sweden. The effect of closing down the service was EUR -0,3 million on adjusted EBITDA and EUR -1,5 million on adjusted EBIT.
• New products and services represented 4,2 % (10,1 %) of net sales.
• Free cash flow amounted to EUR 12,6 million (EUR 4,0 million). The effect of items affecting comparability on free cash flow was EUR -1,2 million (EUR -2,2 million).
• Earnings per share were EUR 0,35 (EUR 0,20).
• Comparable earnings per share were EUR 0,53 (EUR 0,21)¹.

KEY FIGURES

	1.4. -	1.4. -	1.1. -	1.1. -	1.1. -
EUR million	30.6.2019	30.6.2018	30.6.2019	30.6.2018	31.12.2018
Net sales	35,6	15,7	70,1	30,8	98,1
Net sales growth, %	126,1	8,9	127,4	8,9	74,6
Operating profit (EBIT)	5,0	1,0	11,7	5,2	16,7
EBIT margin, %	14,1	6,3	16,7	16,8	17,0
Adjusted EBITDA	12,2	6,6	24,0	13,0	36,1
Adjusted EBITDA margin, %	34,3	42,0	34,2	42,3	36,8
Adjusted EBITDA excluding IFRS 16 impact	11,7	6,6	22,9	13,0	36,1
Adjusted EBITDA excluding IFRS 16 impact margin, %	32,8	42,0	32,6	42,3	36,8
Adjusted operating profit (EBIT)	9,2	5,7	19,0	11,4	32,0
Adjusted EBIT margin, %	25,8	36,6	27,1	36,9	32,7
New products and services of net sales, %	4,0	10,5	4,2	10,1	8,8
Free cash flow	5,3	2,4	12,6	4,0	15,9
Net debt to adjusted EBITDA, x	3,2	pro forma 3,6	3,3	pro forma 3,6	pro forma 3,3

¹ The comparable earnings per share does not contain amortisation from fair value adjustments related to the acquisitions or their tax impact.

Asiakastieto Group has prepared unaudited pro forma financial information to demonstrate the impacts of the UC acquisition, completed on 29 June 2018, on the result of operations and financial position of the Group and to improve the comparability of financial information. In this half year report, unaudited pro forma financial information is shown for the year 2018 as if the share transaction had been completed already on 1 January 2017. The pro forma financial information is indicated as Pro forma information in each instance where it appears in this half year report. The pro forma financial reporting principles are described in Note 1 to this half year report.

The figures in the pro forma summary for the comparison periods 1 January-30 June 2018 and 1 January-31 December 2018 are presented as pro forma figures, as if the acquisition of UC had taken place already at the beginning of 2017. The second half-year figures for 1 July-31 December 2018 are presented as actual reported figures.

Pro forma April - June 2019 in brief

• Net sales amounted to EUR 35,6 million (EUR 34,1 million), an increase of 4,2 % (at comparable exchange rates an increase of 5,8 %).
• Adjusted EBITDA excluding items affecting comparability was EUR 12,2 million (EUR 9,7 million), an increase of 25,8 % (at comparable exchange rates an increase of 26,5 %).
• Adjusted EBITDA excluding IFRS 16 impact was EUR 11,7 million (EUR 9,7 million), an increase of 20,1 % (at comparable exchange rates an increase of 20,8 %).
• Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to the acquisitions was EUR 9,2 million (EUR 8,7 million), an increase of 5,5 %.
• Operating profit (EBIT) was EUR 5,0 million (EUR 3,2 million). Operating profit included items affecting comparability of EUR 1,4 million (EUR 2,8 million) and amortisation from fair value adjustments related to the acquisitions of EUR 2,7 million (EUR 2,7 million).
• UC KYC service was closed down in Sweden. The effect of closing down the service was EUR -0,3 million on adjusted EBITDA and EUR -1,5 million on adjusted EBIT.
• New products and services represented 4,0 % (8,2 %) of net sales.
• Earnings per share were EUR 0,15 (EUR 0,08).
• Comparable earnings per share were EUR 0,24 (EUR 0,17)¹.

Pro forma January - June 2019 in brief

• Net sales amounted to EUR 70,1 million (EUR 66,9 million), an increase of 4,7 % (at comparable exchange rates an increase of 6,7 %).
• Adjusted EBITDA excluding items affecting comparability was EUR 24,0 million (EUR 19,0 million), an increase of 26,3 % (at comparable exchange rates an increase of 27,5 %).
• Adjusted EBITDA excluding IFRS 16 impact was EUR 22,9 million (EUR 19,0 million), an increase of 20,4 % (at comparable exchange rates an increase of 21,6 %).
• Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to the acquisitions was EUR 19,0 million (EUR 17,0 million), an increase of 11,8 %.
• Operating profit (EBIT) was EUR 11,7 million (EUR 7,7 million). Operating profit included items affecting comparability of EUR 1,8 million (EUR 3,8 million) and amortisation from fair value adjustments related to the acquisitions of EUR 5,5 million (EUR 5,5 million).
• UC KYC service was closed down in Sweden. The effect of closing down the service was EUR -0,3 million on adjusted EBITDA and EUR -1,5 million on adjusted EBIT.
• New products and services represented 4,2 % (7,5 %) of net sales.
• Earnings per share were EUR 0,35 (EUR 0,21).
• Comparable earnings per share were EUR 0,53 (EUR 0,39)¹.

PRO FORMA KEY FIGURES

	Actual 1.4. -	1.4. -	Actual 1.1. -	1.1. -	1.1. -
EUR million	30.6.2019	30.6.2018	30.6.2019	30.6.2018	31.12.2018
Net sales	35,6	34,1	70,1	66,9	134,3
Net sales growth, %	4,2	6,8	4,7	4,7	3,6
Operating profit (EBIT)	5,0	3,2	11,7	7,7	19,2
EBIT margin, %	14,1	9,5	16,7	11,5	14,3
Adjusted EBITDA	12,2	9,7	24,0	19,0	42,1
Adjusted EBITDA margin, %	34,3	28,5	34,2	28,3	31,3
Adjusted EBITDA excluding IFRS 16 impact	11,7	9,7	22,9	19,0	42,1
Adjusted EBITDA excluding IFRS 16 impact, %	32,8	28,5	32,6	28,3	31,3
Adjusted operating profit (EBIT)	9,2	8,7	19,0	17,0	37,7
Adjusted EBIT margin, %	25,8	25,5	27,1	25,4	28,1
New products and services of net sales, %	4,0	8,2	4,2	7,5	7,8
Net debt to adjusted EBITDA, x	3,2	3,6	3,3	3,6	3,3

¹ The comparable pro forma earnings per share does not contain amortisation from fair value adjustments related to the acquisitions or their tax impact.

JUKKA RUUSKA, CEO

"Asiakastieto Group is growing and expanding. The Proff acquisition completed at the beginning of July solidifies Asiakastieto's position as the leading provider in the freemium segment of the business information services market in the Nordic countries. Following the acquisition, Asiakastieto's business information services in Finland, Sweden, Norway and Denmark serve approximately 6,5 million unique monthly visitors.

Our growth was moderate in the second quarter. Net sales increased at comparable exchange rates by 5,8 % to EUR 35,6 million (EUR 34,1 million). The Group's net sales were again boosted by the consumer credit information services of the Risk Decisions business area in both markets. At the same time, the Group's net sales were increased by new services, which represented 4,0 % of net sales in the second quarter. Overall, the number of newly launched services was in line with our targets in the second quarter as we continued our determined efforts to provide a service offering that suits customer needs and is continuously developed.

Adjusted EBITDA excluding the impact of IFRS 16 continued to see strong growth at comparable exchange rates, up 20,8 % to EUR 11,7 million (EUR 9,7 million). The increase in EBITDA was attributable to, among other things, cost-efficiencies derived from synergies, lower IT expenses and lower-than-expected personnel costs, which were partly due to the number of ongoing vacancies being higher than anticipated.

On 1 July 2019, in conjunction with the completion of the Proff acquisition, Asiakastieto Group updated its previously published outlook, which did not incorporate the impact of the acquisition. The updated outlook also incorporates the expected impacts of the devalued Swedish krona on the Group's consolidated euro-denominated full financial year figures.

By September 2019 at the latest, all European banks are required to provide access via open interfaces to bank account information when the customer so wishes. This requirement stems from the Payment Services Directive PSD2, which came into effect last year. We are already able to provide a large amount of information to support credit decisions, but more information is still needed, particularly for assessing consumers' solvency. Our PSD2 service helps in this respect by making it possible - subject to the consumer's consent - to incorporate account information into automated digital processes. Access to information on bank account transactions helps with the verification of income information and the calculation of available funds related to credit decisions, for example. The service plays a useful role in society by directly helping prevent over-indebtedness in these important contexts for consumers.

Ensuring and developing the responsibility of Asiakastieto's operations is fundamental to the success of the company. The monitoring and continuous development of corporate responsibility serve the needs of all of our stakeholders. During the review period, we published our first report on non-financial information. The report describes Asiakastieto's key events, results and impacts from the perspective of corporate responsibility in 2018 and illustrates how Asiakastieto incorporates responsibility into its operations and their development. In addition to acting responsibly as a company, we want to help our customers to act responsibly and sustainably by providing services that support corporate responsibility."

FUTURE OUTLOOK

Net sales: Asiakastieto Group expects its net sales growth in 2019 to be in the middle of the range of its long-term target (5-10 %) compared to the previous year's pro forma net sales.

EBITDA: Asiakastieto Group expects its adjusted EBITDA, excluding the effect of IFRS 16 transition, to grow in 2019 at a percentage rate that exceeds the rate of net sales growth compared to the previous year's pro forma adjusted EBITDA.

Capital expenditure: Asiakastieto Group expects its capitalised product development and software expenses in 2019 to exceed the previous year's level on a pro forma basis.

The outlook is subject to risks related to, among other factors, the economic development of the operating countries of the Group as well as the development of the business operations of the Group. The most significant risks related to business operations include, for example, risks related to the success of product and service development activities, launches of new products and services and risks related to competitive tenders and to losing significant customer accounts.

Asiakastieto Group's business risks have been described in more detail on the Company's investor pages at investors.asiakastieto.fi and in the company's listing prospectus, approved by the Financial Supervisory Authority on 10 September 2018 and also available on the investor pages of the company website.

Helsinki, 8 August 2019

ASIAKASTIETO GROUP PLC
Board of Directors

For further information:
Jukka Ruuska
CEO
Tel. [phone]

Distribution:
Nasdaq Helsinki
Major media
investors.asiakastieto.fi

Asiakastieto Group is one of the leading providers of digital business and consumer information services in the Nordic countries. The Group's products and services are primarily used for risk management, finance and administration, decision-making and sales and marketing purposes. We are operating in Finland under the brand Suomen Asiakastieto and in Sweden under the brand UC. Our pro forma annual net sales for 2018 was EUR 134 million and the number of employees was approximately 450. The Group serves several industries, the largest ones including finance and banking as well as wholesale and retail sectors and expert service companies. Asiakastieto Group is listed on Nasdaq Helsinki with the trading code ATG1V. More information about Asiakastieto Group is available at www.asiakastieto.fi and www.uc.se.

Attachment

• Asiakastieto Group Plc_Half Year Financial Report_2019 (https://ml-eu.globenewswire.com/Resource/Download/5aaf10b2-035e-470c-8928-eaac4b09e57e)