“Digia’s fourth-quarter net sales saw year-on-year growth of 18 per cent. Strong net sales growth was supported by good demand, particularly in e-commerce solutions, customised digital solutions, service monitoring solutions, and Microsoft Dynamics systems. Progress on the Income Register project that we are implementing with the Tax Administration also contributed to net sales growth.
Our long-term customer relationships and deliveries of more extensive project and service packages can be seen in our fourth-quarter net sales growth. Digia’s customers are increasingly viewing service development and harnessing technology as a part of wider-reaching aspect of business development instead of developing single service or process. They are seeking a more comprehensive renewal of their business in which operating methods are remodelled to create a better customer experience and generate greater operational efficiency. The greatest benefits will be achieved through the systematic development of the whole, not just development projects as separate parts.
A more comprehensive view of digitalisation creates IT service companies a requirement to understand and deliver more extensive service packages, and to handle their continual development and maintenance. This trend is supporting growth in Digia’s business. Digia stands out from its competitors by offering diversity and compatibility, and providing modern, continually developing expertise. We offer reliable and evolving partnerships in which we support our customers’ business operations with continual service maintenance and their agile development.
The correct integration of digital services, such as web stores, into a company’s back-end systems is a critical aspect of both service quality and flexibility for further development. Smart integration is one of the keys to a company’s capacity for technological change. We are a pioneer in integration solutions and we have recognised status in the integration market. During the fourth quarter, we further strengthened our expertise as a supplier of modern integration solutions (such as APIs) with the acquisition of Integration House Oy. One of our competitive advantages is our ability to help our customers increase the smoothness of their operations.
Full-year net sales rose by 11 per cent in 2017. In line with our strategy, we are seeking growth in, for example, the delivery of end-to-end digital services. Net sales from end-to-end solutions have risen noticeably faster than Digia’s net sales in general.
In order to improve profitability, we launched enhanced quality-improvement measures and changes to our operating methods during the third quarter. Fourth-quarter operating profit remained below the target, but improved clearly on the third quarter, and was EUR 1.1 million.
Digia’s operating profit for 2017 totalled EUR 1.8 million, equivalent to 1.9 per cent of net sales. There were favourable trends in operating profit in all of the most important service areas. Operating profit was significantly burdened by delivery challenges in three projects (EUR 3.5 million loss in 2017) during the second half of the year. Strong investments in the development of digital and financial services as well as in personnel competences also impacted the result.
In 2017, we continued non-organic investments in two service areas: Digital Services, and Integration and Information Management. We strengthened our position in the digital services market with the acquisition of Omni Partners Oy, and bolstered our expertise in integration and API solutions with the acquisition of Integration House Oy. We also renewed and simplified the Digia operating model to safeguard growth. As part of this change, we restructured our organisation and the composition of our Management Team.
Digia is a reliable, agile and growth-focused professional in the Finnish IT sector. During 2017, we invested in creating the foundations for profitable growth. Our goal in 2018 is to further 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. We are expecting our operating profit to improve significantly compared to 2017.”
Digia Plc’s Financial Statement Bulletin 2017, 6 February 2018
President & CEO