Gofore’s growth continued in Q3 2023 – net sales +29%, adjusted EBITA +26%

19.10.2023 09:00:01 EEST | Gofore Oyj | Interim report (Q1 and Q3)

Gofore Plc Interim Report 19 October 2023 at 9.00 a.m. EET

Gofore Plc’s Interim Report January-September 2023: Gofore’s growth continued in Q3 – net sales +29%, adjusted EBITA +26%

July-September 2023

• Net sales growth 29% to 40.8 (31.7) million euros. Organic growth continued strong, +20%.
• Adjusted EBITA 4.7 (3.7) million euros, 11.6 % of net sales.
• Strategy execution continued: private sector net sales grew by 36%, public sector net sales +23%, net sales from outside Finland +95%.
• Utilisation rate was improved compared to second quarter. There was one less workday than in the comparison period, profitability impact on estimate 0.7 million euros.
• Customer price and salary ratio supported profitability, prices +4.5 %, average salary +3.4%.
• Number of employees grew to a total of 1,460 (1,126) people, 78 new employees started.
• On 3 July 2023, Gofore acquired the entire share capital of Creanex Oy, enterprise value 5.0 million euros. The deal strengthened mobile machines digitalisation offering of the Intelligent Industry sector.

January-September 2023

• Net sales grew by 32% and were 137.5 (104.2) million euros. Organic growth of net sales continued strong, +28%.​
• Adjusted EBITA 18.4 (14.5) million euros, 13.4% of net sales.
• Strategy execution continued: private sector net sales grew by 40%, public sector net sales +26%, net sales from outside of Finland +122%.
• Ratio of customer price and salary development was good with prices rising 3.5%, average salary development standing at +3.1%.
• The number of employees grew to a total of 1,460 (1,126) people, overall capacity standing at 1,560 (1,243). ​

There were no significant events after the period.

The interim 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	Q3/2023	Q3/2022	2022
Net sales	40.8	31.7	149.9
Organic Growth of Net Sales, %	19.8%	32.0%	32.2%
Adjusted EBITA	4.7	3.7	22.0
Adjusted EBITA, %	11.6%	11.8%	14.7%
EBITA	4.5	3.8	20.4
Operating Profit (EBIT)	3.4	2.8	16.6
Earnings per share (EPS), undiluted	0.16	0.13	0.78
Earnings per share (EPS), diluted	0.16	0.13	0.78
Number of employees at the end of period	1,460	1,126	1,297
Overall capacity; in-house and subcontracted staff (FTE), at the end of period	1,560	1,243	1,383

Unless otherwise stated, comparing figures refer to the corresponding period of the previous year. Devecto Oy’s figures have been consolidated with Gofore Group’s numbers as of 3 January 2022, eMundo GmbH’s figures as of 1 November 2022 and Creanex Oy’s as of 3 July 2023.

Organic growth is defined by comparing the quarterly net sales in the Group income statement with the net sales of the previous reporting period’s corresponding quarter. The growth is calculated with a comparable Group structure using the Group structure of the time of reporting to calculate pro forma net sales for the corresponding period. The pro forma net sales include the impact of acquisitions and divestments retroactively and it is unaudited.

CEO Mikael Nylund:

“In the third quarter of 2023, Gofore’s business again took leaps forward, generating 29% growth. This means to say we once again excellently executed on our strategy in both our target customer segments, our strategic Digital Society and Intelligent Industry sectors.

Our international business also showed strong growth of 95% compared to previous year. A good performance from the entire Gofore team and proves that our strategy works, and our experts build good trust with our customers every day.

We also succeeded well profitability-wise, profitability remaining about on par with the comparison period, even though there were one less workday than a year ago. Adjusted EBITA rose to 4.7 million euros, showing 26% of growth from previous year.

In the third quarter, we have paid special attention to our profitability through e.g. our recruitment appetite, utilisation rates and cost control. This way, we ensure a healthy foundation of our business and prepare for the possibility of weaker customer demand.

In addition, the favorable customer price-salary ratio we have maintained throughout the year supported third quarter profitability.

The market situation development continues to be macro-driven. Although strong signals of a positive cycle are yet to be seen, a majority of Gofore’s customers have boldly continued to invest in their digitalisation. Our near-term outlook is also supported by the fact that none of our major, public sector agreements will be retendered during the rest of this year nor on the first half of next year.

However, we have lowered the expectations for our recruitment numbers for the rest of the year. Customer demand supports continuing growth in some of our expertise areas, whereas on others we still need to put on brakes, despite good talent being available on the market.

Companies in our industry have had varying success in the prevailing market situation. We are nonetheless seeing a lot of encouraging signs, such as Finland’s decision to transition to primarily digital official communications over the traditional paperwork model. EU announced 2030 to be the start of a digital decade, which promotes important initiatives related to e.g. digitalising business and government services.

Companies see IT and digital investments as competitive edge promoting action as opposed to mere support function efforts. Our expectations for market development are very positive in the medium and long term.

Employees are the heart of all Gofore’s operations, and hence we invest in the wellbeing of Goforeans now and going forward. Our staff’s attrition rate has continued to decrease and now dropped below our target level of 10%. However, in the latest employee experience survey, our eNPS rating was unfortunately lower than in the previous measurement. We think it is mostly due to the overall low spirits of the entire industry, and also the related actions Gofore has taken to prepare.

Our industry has moved on from the exceptionally high customer demand post pandemic. Time will tell if this is another unusual intermediate phase or the new normal. Whatever the case, we have strong faith in our own strategy and team. Our direction with the entire Gofore community is upward and onward!”

Monthly net sales development in 2023

The numbers are unaudited.

Month 2023	Net sales, MEUR 1	Pro forma LTM Net sales 2	Number of employees 3	No. of workdays in Finland	Overall capacity FTE 4	Subcontracting FTE 5
January	15.8 (10,8)	160.6	1,318 (993)	21 (20)	1,225 (917)	186 (147)
February	15.3 (11,3)	164.2	1,342 (1,015)	20 (20)	1,256 (942)	184 (153)
March	18.1 (13.3)	168.0	1,354 (1,043)	23 (23)	1,271 (968)	189 (155)
April	14.5 (11.5)	170.6	1,385 (1,056)	18 (19)	1,293 (988)	187 (156)
May	17.2 (13.1)	174.2	1,400 (1,068)	21 (21)	1,311 (1,004)	192 (163)
June	15.9 (12.5)	176.5	1,396 (1,074)	21 (21)	1,319 (1,015)	170 (162)
July	5.9 (4.1)	182.5	1,423 (1,062)	21 (21)	1,341 (1,004)	83 (78)
August	16.9 (12.9)	186.1	1,448 (1 086)	23 (23)	1,353 (1 016)	166 (156)
September	18.0 (14.8)	187.9	1,460 (1,126)	21 (22)	1,374 (1,060)	186 (183)

Unless otherwise stated, comparing figures refer to the corresponding period of the previous year. Devecto Oy’s figures have been consolidated into Gofore Group’s figures as of 3 January 2022, eMundo GmbH’s figures as of 1 November 2022 and Creanex Oy’s as of 3 July 2023. 

1) Net sales, MEUR indicates the unaudited net sales for the month in question.
2) The last twelve months (LTM) pro forma net sales figure that the company uses tells the net sales for the Group structure of the time of reporting. The pro forma net sales include the impact of acquisitions and divestments retroactively and is unaudited. 3) Number of employees at the end of the review period.
4) Overall Capacity, FTE (Full Time Equivalent) figure shows the overall capacity of the Group’s personnel, converted into a value corresponding to the number of full-time employees. The figure includes the entire personnel, regardless of their role. The figure is not affected by annual leave, time-off in lieu of overtime, sick leave or other short-term absences. Part-time agreements and other long-term deviations from normal working hours reduce the amount of overall capacity in comparison with the total number of employees. The personnel capacity of corporate acquisitions has been accounted for as of the date of the acquisition. 5) Subcontracting, FTE (Full Time Equivalent) figure shows the overall amount of subcontracting used in invoiceable work, converted into a value corresponding to the number of full-time employees. The subcontracting of the companies acquired by Gofore has been accounted for as of the date of the acquisition.

Next financial disclosure

Gofore’s next financial disclosure will be the Financial Statements 2023 release in February 2024. Dates for financial communications in 2024 will be announced before year-end 2023.

Contacts

Mikael Nylund, CEO, Gofore Oyj, +358 40 540 2280, mikael.nylund@gofore.com

About Gofore Oyj

Gofore is an international digital transformation consultancy with Finnish roots. We have 1,400 impact-driven people in 19 locations across Finland, Germany, Austria, Spain, Estonia and Italy. With our technology and business expertise we build an equal digital society and create sustainable solutions for the intelligent industry. Our diverse group of professionals shares a pioneering ambition to create a more humane, sustainable and ethical digital world. Our values guide our business: Gofore is a great workplace that thrives on customer success. In 2022, our net sales amounted to EUR 149.9 million. Gofore Plc’s share is listed on the Nasdaq Helsinki Ltd. in Finland. Our vision is to be the most significant digital transformation consultancy in Europe. Learn to know us better at gofore.com