“Digia’s third-quarter net sales saw year-on-year growth of 10.3 per cent. Demand for our projects and services has remained at a good level. Net sales growth was particularly supported by good demand for both e-commerce and ERP solutions, and progress with the income register project. In addition, the Omni Partners Oy acquisition in the second quarter increased net sales in digital services, in particular, compared to the previous year. Through the acquisition, Digia strengthened its expertise in the digital marketing and e-business development areas, as well as custom-designed solutions based on open source technologies.
The project business accounted for EUR 50.6 (41.8) per cent and the service and maintenance business for 49.4 (58.2) per cent of net sales. Share of the project business increased due to our digital services projects and progress with the income register project. Digia's long-term goal is to increase the service business’s share of net sales through service contracts that follow project phases. The net sales of the product business generated 27.0 (28.7) per cent of the company’s net sales.
Due to delivery challenges in certain projects, we lowered our profitability outlook for 2017. We booked a one-off loss provision for the third quarter, due to which we posted a loss for that quarter. Our investments in the development of digital services also burdened the result. Digia’s operating result for the third quarter was EUR -0.7 million and its operating margin stood at -3.3 per cent. The required quality improvement measures and changes in practices have been launched as corrective measures. We believe that the third-quarter loss was a one off and that we will achieve a clearly positive operating result for the fourth quarter.
The digitalisation megatrend is still gaining momentum. In this market, Digia is a comprehensive provider from business design to service implementation. Digia’s competitive advantages are consultative dialogue with our customers and strong technological expertise. Our strength is our deep understanding of the benefits that digitalisation yields for our customers’ business operations. Combined with our wide-ranging understanding of how different services and solutions are integrated into back-end systems and external data sources, this enables the development of our customers’ multichannel business operations. Digia is a pioneer in modern integration solutions, such as API management.
Digia is a growth-focused, trustworthy and agile Finnish professional in the Finnish IT sector. In 2017, we have invested in creating the foundations of profitable growth. Our goal is to strengthen the company’s position, particularly in the growing markets for digital services, process digitalisation and the service business. We are also actively seeking suitable acquisitions in order to accelerate our growth."
Digia Plc’s Business Review, 25 October 2017
President & CEO