News Tag: Q1

JANUARY – MARCH 2025, IFRS

• Net sales increased 10.0% and were EUR 7,585 thousand (6,897)
• EBITDA was EUR 2,944 thousand (1,398), 38.8% (20.3) of net sales
• Adjusted EBITDA was EUR 2,026 thousand (1,400), 26.7% (20.3) of net sales
• EBIT was EUR 2,421 thousand (942), 31.9% (13.7) of net sales
• Adjusted EBIT was EUR 1,750 thousand (1,120), 23.1% (16.2) of net sales
• Profit of the review period was EUR 957 thousand (597), 12.6% (8.7) of net sales

Key Figures, IFRS

*The calculation of key figures has been changed for other operating income and the comparison periods have been changed accordingly.

CEO Alpo Luostarinen

The first quarter proceeded with cautious development, yet during the first months of the year we took several important steps to advance our strategic objectives. Our revenue amounted to 7.6 million euros, with revenue growth of 10.0%. Adjusted EBIT stood at 1.8 million euros, and the adjusted operating profit margin was 23.1%.

The underlying market recovery in our key customer verticals, which began in the latter part of last year, has manifested as a cautious uptick in demand, though it is difficult to identify a clear trend going forward. The market situation remains significantly uncertain, and assessing the impact of international trade policy on our business is still challenging at this stage. We have noted an increase in our customers’ payment delays and credit loss risks in the early part of the year, which has prompted us to take measures to manage these risks.

Sales to new customers developed moderately in the first quarter, and the total value of new deals for ERP solutions continued its slight growth. A clear majority of these new sales involved wholesale and manufacturing ERP solutions, which we focus on more clearly in the future. Churn was slightly elevated at the beginning of the year due to significant ongoing changes. On the other hand, our existing customers have expanded their use of our software since the start of the year, leading to clearly positive NRR development.

Implementation of the Azure cloud platform transition was nearly completed by the turn of March and April. The majority of Lemonsoft ERP customer environments were migrated to the Azure platform during the early part of the year, enabling better performance and scalability in the long term. The transition has posed temporary challenges for some of our customers, and we have endeavored to address these issues as quickly as possible, in close cooperation with them. We have also carried out several product development measures aimed at significantly improving performance in the new environment.

During the beginning of the year, we have continued to develop our organization to ensure competitiveness and long-term profitability. In April, we initiated reorganization negotiations with the aim of significantly streamlining our operations and securing profitable growth in the coming years. Through these actions, we seek to achieve cost savings of approximately 2 million euros by the end of 2026 compared to 2024. These negotiations are part of our long-term efforts to build an efficient, flexible, and customer-centric organization.

Our clear objective is to improve the competitiveness of both our products and our organization, and to continuously introduce more advanced solutions to manage our customers’ business operations. Although uncertainty remains in the market environment, we see clear indications that we are on the right track. We believe that the ongoing technology and organizational changes, along with a sharper focus across all functions on our key customer segments, will help us better and more efficiently meet our customers’ needs.

Group Financial Development

Group financial result and profitability

January – March 2025
Net sales for the review period were EUR 7,585 thousand (6,897). Net sales increased by EUR 687 thousand, 10.0%. Organic growth of the review period was 3.1% and organic growth of the recurring revenue was 4.6%. Net sales increased mainly due to the acquisition of Atmotics Oy (2024) and Applirent Oy (2024), whose net sales were not included in the comparison period.

The share of SaaS income was 73.9% (71.8), the share of transaction income 10.5% (11.1), and consulting and other income 15.6% (17.0).

EBITDA was EUR 2,944 thousand (1,398), 38.8% (20.3) of net sales. Adjusted EBITDA (adjustments specified in the Alternative performance measures section) was EUR 2,026 thousand (1,400), 26.7% (20.3) of net sales. The most significant adjustment item is the recognition of additional purchase price as revenue.

EBIT was EUR 2,421 thousand (942), 31.9% (13.7) of net sales. Adjusted EBIT (adjustments specified in the Alternative performance measures section) was EUR 1,750 thousand (1,120), 23.1% (16.2) of net sales. The most significant adjustment item is the recognition of additional purchase price as revenue.

Profit for the review period was EUR 957 thousand (597), 12.6 % (8.7) of net sales.

Cash flow from operating activities was EUR 1,857 thousand (1,465).

Balance sheet, financing and investments
The balance sheet total at the end of the review period was EUR 52,088 thousand (53,862 at the end of the year 2024). The provision for credit losses on trade receivables and financial receivables has been reassessed and the provision at the end of the reporting period is EUR 1,109 thousand (126 at the end of the year 2024).

The Group has capitalized development expenses of EUR 223 thousand during the year 2025 (206 during the comparison period 2024). At the end of the review period, the Group's balance sheet included capitalized development expenses totaling EUR 2,821 thousand (2,734 at the end of the year 2024).

Total equity was EUR 32,654 thousand (32,526 at the end of the year 2024), equity increased EUR 128 thousand.

Equity ratio was 63.0% (60.4 at the end of the year 2024) and interest-bearing debt was EUR 9,605 thousand (10,405 at the end of the year 2024).

Cash and cash equivalents at the end of the review period were EUR 7,139 thousand (7,650 at the end of the year 2024).

Personnel

The Group’s number of employees was 230 (220) on 31 March 2025. We reported our Group personnel as follows:

• R&D 110 employees
• Customer functions 104 employees
• Other functions, a total of 16 employees

Share-based incentive plan

The Board of Directors of Lemonsoft Oyj has established a new share-based incentive plan for the key employees of the company in March 2024. The aim of the new plan is to align the objectives of the shareholders and the key employees in order to increase the value of the company in the long-term, to encourage the management to personally invest in the company’s shares, to retain the target group at the company, and to offer them a competitive incentive plan in which the participants may earn shares as a reward for performance and their personal investment.

The new Performance Matching Share Plan 2024 – 2028 includes three performance periods, covering financial years 2024 – 2026, 2025 – 2027 and 2026 – 2028. The Board will decide annually on the commencement and details of a performance period. The prerequisite for participation in the plan and receiving the reward is that the person allocates freely transferable Lemonsoft Oyj shares held by him or her to the plan or acquires the company’s shares in a number determined by the Board.

The rewards from the plan will be paid partly in the company’s shares and partly in cash. The rewards will be paid by the end of May in the year following the end of the performance period. The cash proportion is intended for covering taxes and tax-related costs arising from the reward to the participant. In general, no reward will be paid if a participant’s employment or service in the group ends before the reward payment.

The performance criterion in the first performance period 2024 – 2026 is the Total Shareholder Return of the company’s share (TSR). The achievement of the required TSR levels will determine the proportion out of the maximum reward that will be paid to a participant. The target group of the plan consisted of 4 persons (the CEO and three members of the Management Team). The gross rewards from the first performance period 2024 – 2026 correspond to the value of an approximate maximum total of 77,000 Lemonsoft Oyj shares, including the proportion to be paid in cash. The final number of shares depends on the number of shares acquired by participants and the achievement of the TSR levels. The reward to be paid on the basis of the plan will be capped if the limits set by the Board for the payable reward from the performance period 2024 – 2026 are exceeded. The number of key employees changed during the performance period and consisted 2 persons at the end of the reporting period.

The performance criterion in the second performance period 2025–2027 is the Total Shareholder Return of the company’s share (TSR). The achievement of the required TSR levels will determine the proportion out of the maximum reward that will be paid to a participant. The target group of the plan for this period consists of 4 persons (including the CEO and three members of the Management Team). The gross rewards for this second period correspond to a maximum total of 102,675 Lemonsoft Oyj shares (including the cash portion). The final number of shares depends on the participant’s share acquisition and achievement of the TSR levels. The reward to be paid on the basis of the plan will be capped if the limits set by the Board for the payable reward from the performance period 2025 – 2027 are exceeded.

Shares and shareholders

Share capital and number of shares
The company has one series of shares, and all shares have equal rights. At the end of the review period, Lemonsoft Oyj’s share capital consisted of 18,514,153 (18,562,005) shares. The average number of outstanding shares during the review period January-March was 18,580,528 (18,562,005). At the end of the review period, Lemonsoft Oyj held 157,479 shares.

On 4 October 2024, the Board of Directors of Lemonsoft Oyj decided to launch a buyback programme of the company’s own shares based on the authorisation granted by the Annual General Meeting held on 9 April 2024. The programme commenced on 7 October 2024 and ended on 9 April 2025. During the buyback programme, Lemonsoft Oyj acquired a total of 168,401 of its own shares at an aggregate value of EUR 993,712.83. The company paid an average of EUR 5.9009 per share. The shares were acquired on Nasdaq First North Growth Market Finland in public trading at the market price prevailing at the time of purchase. Lemonsoft Oyj held 157,479 of its own shares at the end of the reporting period.

The company's share is traded on the First North Growth Market Finland marketplace maintained by Nasdaq Helsinki Oy. During the review period January-March, the highest share price was EUR 6.75 and the lowest EUR 5.50. The closing price on 31 March 2025 was EUR 5.50. The market value of the company at the closing price of the review period was approximately EUR 102,7 million. Average daily trading volume during the review period was 10,371 shares (EUR 61,264).

On 31 March 2025, the company had a total of 2,242 shareholders. The company's largest shareholders can be found on the company's investor website at https://investors.lemonsoft.fi/osakkeenomistajat/.

Authorizations of the Board of Directors
Lemonsoft Oyj has decided in its Annual General Meeting on 9 April 2025 to authorize the Board of Directors to decide on the repurchase of the company’s own shares on the following terms and conditions:

• By virtue of the authorization, the Board of Directors is authorized to decide on the repurchase of a maximum of 1,800,000 of the company’s own shares. The proposed maximum number of shares to be repurchased corresponds to approximately 9.6% of the company’s shares. The authorization includes the right to accept the company’s own shares as a pledge.
• The company’s own shares can be repurchased otherwise than in proportion to the existing shareholdings of the company’s shareholders (directed repurchase).
• The company’s own shares can be repurchased at the Nasdaq First North Growth Market Finland marketplace or outside of the marketplace.
• Own shares can be repurchased at a price formed on First North Growth Market Finland on the date of the repurchase or at a price otherwise determined by the markets.
• The shares shall be repurchased using the company’s unrestricted equity.
• The shares shall be repurchased for the purpose of financing or carrying out acquisitions or other arrangements, to implement the company’s incentive schemes, to develop the company’s capital structure, or for other purposes as decided by the Board of Directors.
• The Board of Directors shall decide on the other conditions related to the repurchase of the company’s own shares.

The authorization is valid until the 2026 Annual General Meeting, but not beyond 30 June 2026. The authorization shall replace the authorization granted to the Board of Directors by the Annual General Meeting of 9 April 2024 regarding the repurchase of a maximum of 1,800,000 of the company’s own shares.

The Annual General Meeting authorized the Board to decide on an ordinary or bonus issue of shares and the granting of special rights (as defined in Section 1, Chapter 10 of the Limited Liability Companies Act) in one or more instalments:

• This issue may total a maximum of 1,800,000 shares corresponding to a maximum of approximately 9.6% of all shares of the company. The authorization applies to both new shares and treasury shares held by the company. The authorization may be used to fund or complete acquisitions or other business transactions, for offering share-based incentive schemes, to develop the company’s capital structure, or for other purposes decided by the Board of Directors.
• The authorization entitles the Board of Directors to resolve on all conditions of the issuance of shares and special rights entitling to shares, including the right to deviate from the shareholders’ pre-emptive right.

The authorization is in force until the next Annual General Meeting; however, no longer than until 30 June 2026, and it replaces the previous authorizations.

Significant short-term risks and uncertainties

The deterioration of the economic situation and geopolitical changes may have direct and indirect effects on Lemonsoft's business. These may be reflected in the business operations of Lemonsoft's customer companies, for example, in reduced investments by industrial manufacturing companies and decreased needs of subcontracting chains, as well as business and bankruptcy risks. In turn, customers' business challenges may affect Lemonsoft's new customer acquisition, upsells from existing customers, and customer retention.

In the longer term, the biggest challenge for our industry is the availability of skilled personnel. Success of the Group and opportunities for growth depend largely on how well we can recruit, motivate, and engage more skilled personnel and develop our expertise.

In Lemonsoft's cost structure, the single most significant factor is personnel costs, and an increase in the general price level may increase the pressure to increase personnel costs. Lemonsoft constantly monitors the development of the situation from a risk management perspective and strives to ensure the continuation of profitable growth by optimizing its cost structure and pricing.

The ERP market is generally a highly competitive market, and the industry is fragmented. Smaller players are primarily focused in a specific sector of SMEs and larger players do not compete directly for customers in the same market. However, competition in Lemonsoft's operating markets may intensify due to existing competitors or agile new entrants.

Risks related to information security and the IT systems of service providers are a significant factor affecting the security and continuity of the Group's business. Lemonsoft constantly invests in high reliability and high security systems and strives to ensure the high quality of the services it purchases by selecting leading players in the industry as its key partners. European data protection regulations may also bring unexpected risks to Lemonsoft's operating environment.

Success in acquisitions and related integration work is a key factor for Lemonsoft's growth. The company has made several acquisitions in recent years and aims to continue to grow through acquisitions. There may be unexpected risks associated with target companies and their integration into Lemonsoft.

Dividends paid

The Annual General Meeting decided on 9 April 2025 that a dividend of EUR 0.14 per share will be paid according to the confirmed balance sheet for the accounting period ending on 31 December 2024. About total of EUR 2.6 million was paid in dividends after the review period, 23 April 2025.

Events after the review period

Lemonsoft Oyj has decided on April 7, 2025, to initiate change negotiations in the Lemonsoft Group in accordance with the Cooperation Act.

Lemonsoft Oyj announced April 23, 2025, that Tuomas Koivisto will leave his position in Lemonsoft’s management team as well as his roles as Lemonsoft Oyj’s Chief Commercial Officer (CCO) and as CEO of Finvoicer Group Oy.

Profit forecast for 2025 (unchanged)

Lemonsoft estimates that the net sales for the financial year 2025 will increase by 0-10 percent compared to the financial year 2024, and that adjusted EBIT will be 18-24 percent of net sales in 2025.

Financial information

Lemonsoft Oyj will publish the following financial information in 2025:

• Half-year Report January – June 2025 on Thursday, 14 August 2025
• Interim Report January – September 2024 on Friday, 31 October 2025

Webcast for investors and media

Lemonsoft will host a live webcast for investors and the media in English on April 25, 2025 at 1:00pm EET. The webcast can be followed online live via this link: https://player.videosync.fi/lemonsoft/2025-q1-results

A recording of the event and the presentation material will be available after the event at https://investors.lemonsoft.fi/.

Lemonsoft Oyj
Board of Directors

JANUARY – MARCH 2024, IFRS

• Net sales increased 16.5% and were EUR 6,897 thousand (5,918)
• EBITDA was EUR 1,398 thousand (1,611), 20.3% (27.2) of net sales
• Adjusted EBITDA was EUR 1,400 thousand (1,618), 20.3% (27.3) of net sales
• EBIT was EUR 942 thousand (1,361), 13.7% (23.0) of net sales
• Adjusted EBIT was EUR 1,120 thousand (1,464), 16.2% (24.7) of net sales
• Profit of the review period was EUR 597 thousand (949), 8.7% (16.0) of net sales

  
 
Key Figures, IFRS

 
 


 Interim CEO Kari Joki-Hollanti
The first quarter of the year was, as expected, challenging in terms of organic growth. Our net sales were 6,9 M€ and the growth in net sales was 16.5%. As in previous quarters, the growth in net sales came from acquisitions. Adjusted EBIT was 1,1 M€ and the adjusted EBIT margin was 16.2%.

According to the confidence indicator of the Confederation of Finnish Industries, the economic climate in Finland is weak and there are no signs of improvement in the short term. According to Statistics Finland, net sales in manufacturing, which is our most important industry, fell significantly in the second half of 2023. The decline has continued at a more moderate pace in the beginning of 2024, but political labor disputes and strikes have certainly not improved the situation. Our customers are typically subcontractors to large industrial companies, so the decline in sales affects them as well. Our SaaS invoicing is based on active users, so customers’ own adjustment measures are also reflected in our business. Based on industrial surveys, the business outlook for manufacturing businesses is particularly worrying. The business outlook balance figure was close to the levels seen during the financial crisis and has already fallen below the levels seen during the COVID-19 pandemic.

The number of our customers remained at the previous level. Revenue churn decreased slightly from the previous two quarters, but customers’ adjustment measures were reflected in the reduction of active users. New customer sales remained at the previous level. More recently, customers have also been purchasing more affordable solutions, such as our Duunissa.fi work time management services and HelpostiLasku services.

Nevertheless, our business is very profitable and stable. I think that now is the right time for us to continue investing in an excellent customer experience and product development. Businesses need efficient and usable ERP solutions for the future and, when demand recovers, we will be ready to increase our market share.

 
Group Financial Development

Group financial result and profitability

January – March 2024
Net sales for the review period were EUR 6,897 thousand (5,918). Net sales increased by EUR 979 thousand, 16.5%. Organic growth of the review period was -1.2% especially consulting and other income remained at a lower level than in the comparison period. Organic growth of the recurring revenue was positive. Net sales increased due to the acquisitions of Finvoicer Group Oy (2023), whose net sales were not included in the comparison period.

The share of SaaS income was 71.8% (76.1), the share of transaction income 11.1% (4.8), and consulting and other income 17.0% (19.0).

EBITDA was EUR 1,398 thousand (1,611), 20.3% (27.2) of net sales. Adjusted EBITDA (adjustments specified in the Alternative performance measures section) was EUR 1,400 thousand (1,618), 20.3% (27.3) of net sales. The EBITDA and adjusted EBITDA for the review period have been negatively affected by the compensation under the termination agreement with the CEO.

EBIT was EUR 942 thousand (1,361), 13.7% (23.0) of net sales. Adjusted EBIT (adjustments specified in the Alternative performance measures section) was EUR 1,120 thousand (1,464), 16.2% (24.7) of net sales. The EBIT and adjusted EBIT for the review period have been negatively affected by the compensation under the termination agreement with the CEO.

Profit for the review period was EUR 597 thousand (949), 8.7% (16.0) of net sales.

Cash flow from operating activities was EUR 1,578 thousand (1,477).

Balance sheet, financing and investments
The balance sheet total at the end of the review period was EUR 47,813 thousand (48,885 at the end of the year 2023).

The Group has capitalized development expenses of EUR 206 thousand during the year 2024. At the end of the review period, the Group's balance sheet included capitalized development expenses totalling EUR 2,442 thousand (2,352 at the end of the year 2023).

Total equity was EUR 31,032 thousand (30,422 at the end of the year 2023), equity increased EUR 610 thousand.

Equity ratio was 64.6% (61.9 at the end of the year 2023) and interest-bearing debt was EUR 7,810 thousand (8,399 at the end of the year 2023).

Cash and cash equivalents at the end of the review period were EUR 7,315 thousand (7,389 at the end of the year 2023).

Personnel
The Group number of employees was 220 (184) on 31 March 2024. We reported our Group personnel as follows:

• R&D 96 employees
• Customer functions 111 employees
• Other functions, a total of 13 employees

Share-based incentive plan
The Board of Directors of Lemonsoft Oyj has establish a new share-based incentive plan for the selected key employees of the company. The aim of the new plan is to align the objectives of the shareholders and the key employees in order to increase the value of the company in the long-term, to encourage the management to personally invest in the company’s shares, to retain the target group at the company, and to offer them a competitive incentive plan in which the participants may earn shares as a reward for performance and their personal investment.
The new Performance Matching Share Plan 2024 – 2028 includes three performance periods, covering financial years 2024 – 2026, 2025 – 2027 and 2026 – 2028. The Board will decide annually on the commencement and details of a performance period. The prerequisite for participation in the plan and receiving the reward is that the person allocates freely transferable Lemonsoft Oyj shares held by him or her to the plan or acquires the company’s shares in a number determined by the Board.
The rewards from the plan will be paid partly in the company’s shares and partly in cash. The rewards will be paid by the end of May in the year following the end of the performance period. The cash proportion is intended for covering taxes and tax-related costs arising from the reward to the participant. In general, no reward will be paid if a participant’s employment or service in the group ends before the reward payment.
The performance criterion in the first performance period 2024 – 2026 is the Total Shareholder Return of the company’s share (TSR). The achievement of the required TSR levels will determine the proportion out of the maximum reward that will be paid to a participant. The target group of the plan consists of 4 persons (the CEO and three members of the Management Team). The gross rewards from the first performance period 2024 – 2026 correspond to the value of an approximate maximum total of 77,000 Lemonsoft Oyj shares, including the proportion to be paid in cash. The final number of shares depends on the number of shares acquired by participants and the achievement of the TSR levels. The reward to be paid on the basis of Plan will be capped if the limits set by the Board for the payable reward from the performance period 2024 – 2026 are reached.
 
Shares and shareholders

Share capital and number of shares
The company has one series of shares, and all shares have equal rights. At the end of the review period, Lemonsoft Oyj’s share capital consisted of 18,562,005 (18,538,019) shares. The average number of outstanding shares during the review period January – March was 18,562,005 (18,441,633).

The company's share is traded on the First North Growth Market Finland marketplace maintained by Nasdaq Helsinki Oy. During the review period October – December, the highest share price was EUR 7.62 and the lowest EUR 5.70. The closing price on 31 March 2024 was EUR 5.80. The market value of the company at the closing price of the review period was approximately EUR 107.7 million. Average daily trading volume during the review period was 3,232 shares (EUR 20,214).

On 31 March 2024, the company had a total of 2,470 shareholders. The company's largest shareholders can be found on the company's investor website at https://investors.lemonsoft.fi/osakkeenomistajat/.

Authorizations of the Board of Directors
Lemonsoft Oyj has decided in its Annual General Meeting on 9 April 2024 to authorize the Board of Directors to decide on the repurchase of the company’s own shares on the following terms and conditions:

• By virtue of the authorization, the Board of Directors is authorized to decide on the repurchase of a maximum of 1,800,000 of the company’s own shares. The proposed maximum number of shares to be repurchased corresponds to approximately 9.7% of the company’s shares. The authorization includes the right to accept the company’s own shares as a pledge.
• The company’s own shares can be repurchased otherwise than in proportion to the existing shareholdings of the company’s shareholders (directed repurchase).
• The company’s own shares can be repurchased at the Nasdaq First North Growth Market Finland marketplace or outside of the marketplace.
• Own shares can be repurchased at a price formed on First North Growth Market Finland on the date of the repurchase or at a price otherwise determined by the markets.
• The shares shall be repurchased using the company’s unrestricted equity.
• The shares shall be repurchased for the purpose of financing or carrying out acquisitions or other arrangements, to implement the company’s incentive schemes, to develop the company’s capital structure, or for other purposes as decided by the Board of Directors.
• The Board of Directors shall decide on the other conditions related to the repurchase of the company’s own shares.

 
The authorization is valid until the 2025 Annual General Meeting, but not beyond 30 June 2025. The authorization shall replace the authorization granted to the Board of Directors by the Annual General Meeting of 4 April 2023 regarding the repurchase of a maximum of 1,800,000 of the company’s own shares.
The Annual General Meeting authorized the Board to decide on an ordinary or bonus issue of shares and the granting of special rights (as defined in Section 1, Chapter 10 of the Limited Liability Companies Act) in one or more instalments:

• This issue may total a maximum of 2,000,000 shares corresponding to a maximum of approximately 10.8% of all shares of the company. The authorization applies to both new shares and treasury shares held by the company. The authorization may be used to fund or complete acquisitions or other business transactions, for offering share-based incentive schemes, to develop the company’s capital structure, or for other purposes decided by the Board of Directors.
• The authorization entitles the Board of Directors to resolve on all conditions of the issuance of shares and special rights entitling to shares, including the right to deviate from the shareholders’ pre-emptive right.

The authorization is in force until the next Annual General Meeting; however, no longer than until 30 June 2025, and it replaces the previous authorizations.
Lemonsoft Oyj's Board of Directors has decided on February 15, 2024 directed share issue and deviation from the shareholders' preemptive right based on the authorization given by the Annual General Meeting on 4 April 2023.The share issue is related to the acquisition of Finvoicer Group Oy, which Lemonsoft announced on June 1, 2023. New shares a total of 17,986 (112 thousand euros) were registered in the trade register on April 15, 2024. As a result of the share issue, the total number of Lemonsoft Oyj’s outstanding shares increased to 18,579,991 shares.

Significant short-term risks and uncertainties
The deterioration of the economic situation, the impact of inflation and events with a global impact, such as the war in Ukraine, may have direct and indirect effects on Lemonsoft's business. These may be reflected in the business operations of Lemonsoft's customer companies, for example, in reduced investments by industrial manufacturing companies and decreased needs of subcontracting chains, as well as business and bankruptcy risks. In turn, customers' business challenges may affect Lemonsoft's new customer acquisition, upsells from existing customers, and customer retention.

In the longer term, the biggest challenge for our industry is the availability of skilled personnel. Success of the Group and opportunities for growth depend largely on how well we can recruit, motivate, and engage more skilled personnel and develop our expertise.

In Lemonsoft's cost structure, the single most significant factor is personnel costs, and an increase in the general price level may increase the pressure to increase personnel costs. Lemonsoft constantly monitors the development of the situation from a risk management perspective and strives to ensure the continuation of profitable growth by optimizing its cost structure and pricing. The ERP market is generally a highly competitive market, and the industry is fragmented. Smaller players are primarily focused in a specific sector of SMEs and larger players do not compete directly for customers in the same market. However, competition in Lemonsoft's operating markets may intensify due to existing competitors or agile new entrants.

Risks related to information security and the IT systems of service providers are a significant factor affecting the security and continuity of the Group's business. Lemonsoft constantly invests in high reliability and high security systems and strives to ensure the high quality of the services it purchases by selecting leading players in the industry as its key partners. European data protection regulations may also bring unexpected risks to Lemonsoft's operating environment.

Success in acquisitions and related integration work is a key factor for Lemonsoft's growth. The company has made several acquisitions in recent years and aims to continue to grow through acquisitions. There may be unexpected risks associated with target companies and their integration into Lemonsoft.

Dividends paid
The Annual General Meeting decided on 9 April 2024 that a dividend of EUR 0.14 per share will be paid according to the confirmed balance sheet for the accounting period ending on 31 December 2023. About total of EUR 2.6 million was paid in dividends after the review period, 22 April 2024.

Events after the review period
There were no significant events after the review period.

Outlook 2024
Lemonsoft's goal is to continue growth, both by increasing the number of software modules offered to its existing customer base and by expanding its customer base with new customer acquisition. The company estimates that the prevailing economic situation will continue to restrain the growth of new sales and the current customer base.

Profit forecast for 2024
Lemonsoft estimates that the net sales for the financial year 2024 will increase by 10-18 percent compared to the financial year 2023, and that adjusted EBIT will be 23-28 percent of net sales in 2024.

Financial information in 2024
Lemonsoft Oyj will publish the following financial information in 2024:

• Half-year Report January – June 2024 on Thursday, 8 August 2024
• Interim Report January – September 2024 on Tuesday, 5 November 2024

 
 
For further information, please contact:
Kari Joki-Hollanti
Interim CEO
kari.joki-hollanti@lemonsoft.fi
+358 044 730 9271

Alpo Luostarinen
Director, M&A and IR
alpo.luostarinen@lemonsoft.fi
+358 50 911 3507

Certified Adviser:
Aktia Alexander Corporate Finance Oy, +358 50 520 4098
 
About Lemonsoft Oyj
Lemonsoft is a Finnish software company that designs, develops and sells ERP software solutions to streamline its customers’ processes across different business lines and administration. The extensive offering of software solutions and related services enables the company to provide its customers with holistic service. The company’s standardized and scalable software solutions are delivered mainly from the cloud and are based on the SaaS model in which customers pay a monthly service fee for the use of the software. The company operates in the ERP software market primarily as a service provider for SMEs. The company’s customer base includes customers from especially industrial manufacturing, wholesale and retail, professional services automation, construction and accounting.
Get to know us better at www.lemonsoft.fi.
Distribution
Nasdaq Helsinki Oy
Principal media

JANUARY-MARCH 2023, IFRS

• Net sales increased 18.3% and were EUR 5,918 thousand (5,002)
• EBITDA was EUR 1,611 thousand (1,542), 27.2% (30.8) of net sales
• Adjusted EBITDA was EUR 1,618 thousand (1,553), 27.3% (31.0) of net sales
• EBIT was EUR 1,361 thousand (1,432), 23.0% (28.6) of net sales
• Adjusted EBIT was EUR 1,464 thousand (1,443), 24.7% (28.8) of net sales
• Profit of the review period was EUR 949 thousand (1,154), 16.0% (23.1) of net sales

Key Figures, IFRS

CEO Kari Joki-Hollanti

The year 2023 began, as we expected, in an uncertain atmosphere. Our net sales grew by 18.3% and adjusted EBIT was 24.7% of net sales. Organic growth was slower than expected and we are not satisfied with its development. During the rest of the year, we will actively take measures to accelerate organic growth and improve profitability.

The number of customers was 4,600 at the end of March, while a year earlier it was 3,800. Previously, we counted as customers the companies using our software. We have now changed the calculation method to count as customers only those to whom we send an invoice. This change makes the definition clearer and gives a better view of our average revenue per customer.

We continue investing into product leadership and customer experience according to our strategic focus areas. We have started developing a new version of Kellokortti built on LemonOnline technology, with the goal of bringing a more advanced work time monitoring solution to the market. Development of the current version of Kellokortti continues normally, and customers will gradually get access to the new generation product. The first component of the new work time monitoring solution is the Shift Planning module, which will be launched in spring 2023. I believe that our strong investments in product development will lead to stronger revenue growth in the future, once the uncertainties in the economy subside.

In terms of customer experience, we continue our strong focus on our target industries. We strive to provide even faster and more agile service to our customers in industrial manufacturing, wholesale, construction and professional services through a new industry-focused organization. Our value proposition for each industry is clear, and we have simplified the implementation models of products and services.

Our platform services were hit by a malware attack at the end of March. As a precaution, we took down our servers, which impacted widely on our customers' business operations. The precautions were taken because we could not confirm whether the malware had spread and compromised customer data. Manual investigation and restarting of the servers took time, and customer service was significantly affected. However, due to the efforts of our personnel, the services were restored according to plan.

We have transitioned from Finnish accounting practices (FAS) to international IFRS reporting, and we announced the transition in more detail on 11 April 2023. The date of transition was 1 January 2022, and this interim report is the first to be prepared in accordance with IFRS reporting. The comparative figures are also in accordance with IFRS. We believe that the transition to IFRS reporting will increase the comparability of our financial figures with other companies in the industry, as well as increase the interest of international investors in our company.

Group Financial Development

Group financial result and profitability

January-March 2023
Net sales for the review period were EUR 5,918 thousand (5,002). Net sales increased by EUR 916 thousand, 18.3%. Organic growth of the review period was 1.2%. Net sales grew especially due to new customer acquisition and the acquisitions of Logentia Oy (2022), Finazilla Oy (2022) and Duunissa.fi business (2022), whose net sales were not included in the comparison period.

The share of SaaS income was 76.1% (77.6), the share of transaction income 4.8% (5.6), and consulting and other income 19.0% (16.8).

EBITDA was EUR 1,611 thousand (1,542), 27.2% (30.8) of net sales. Adjusted EBITDA (adjustments specified in the Alternative performance measures section) was EUR 1,618 thousand (1,553), 27.3% (31.0) of net sales.

EBIT was EUR 1,361 thousand (1,432), 23.0% (28.6) of net sales. Adjusted EBIT (adjustments specified in the Alternative performance measures section) was EUR 1,464 thousand (1,443), 24.7% (28.8) of net sales.

Profit for the review period was EUR 949 thousand (1,154), 16.0% (23.1) of net sales.

Cash flow from operating activities was EUR 1,434 thousand (1,000).

Balance sheet, financing and investments
The balance sheet total at the end of the review period was EUR 39,034 thousand (38,194 at the end of the year 2022).

The Group has capitalized development expenses of EUR 537 thousand during the review period. At the end of the review period, the Group's balance sheet included capitalized development expenses totalling EUR 1,362 thousand (849 at the end of the year 2022).

Equity was EUR 28,332 thousand (26,292 at the end of the year 2022), equity increased EUR 2,040 thousand.

Equity ratio was 73.7% (69.7 at the end of the year 2022) and interest-bearing debt was EUR 2,985 thousand (3,031 at the end of the year 2022).

Cash and cash equivalents at the end of the review period were EUR 11,287 thousand (11,692 at the end of the year 2022).

Personnel, management and administration

The Group number of employees was 182 (158) on 31 March 2023.

We have updated the organizational structure as of 1.1.2023. After the update, we report our personnel as follows:

• R&D 91 employees
• Customer functions 79 employees
• Other functions, a total of 12 employees

Annual General Meeting

Lemonsoft Oyj’s Annual General Meeting was held on 4 April 2023 in Vaasa. The Annual General Meeting adopted the financial statements for the year 2022 and discharged the members of the Board of Directors and the CEO from liability for the last financial year.

In accordance with the proposal of the Shareholders' Nomination Board, the Annual General Meeting resolved that the Board of Directors shall consist of five actual members. Christoffer Häggblom, Kari Joki-Hollanti, Ilkka Hiidenheimo, Saila Miettinen-Lähde and Michael Richter were re-elected as members of the Board of Directors. The Board has elected Christoffer Häggblom as Chairman from among its members.

The Annual General Meeting decided that KPMG will continue as the company's auditor. Kim Järvi, Authorized Public Accountant, will continue as the responsible auditor appointed by the audit firm.

The Annual General Meeting authorized the Board of Directors to decide on the repurchase of the company’s own shares on the following terms and conditions:

• By virtue of the authorization, the Board of Directors is authorized to decide on the repurchase of a maximum of 1,800,000 of the company’s own shares. The proposed maximum number of shares to be repurchased corresponds to approximately 9.7% of all the company’s shares. The authorization includes the right to accept the company’s own shares as a pledge.

The authorization is valid until the 2024 Annual General Meeting, but not beyond 30 June 2024.

The Annual General Meeting authorized the Board to decide on a share issue against payment or a share issue without payment and the granting of special rights (as defined in Section 1, Chapter 10 of the Limited Liability Companies Act) in one or more instalments with the following terms and conditions:

• By virtue of the authorization the share issue may be a maximum of 2,000,000 shares. The authorization applies to both issuing new shares and to transferring of treasury shares held by the company. The authorization may be used to fund or complete acquisitions or other business transactions, for implementation of share-based incentive schemes, to develop the company’s capital structure, and for other purposes decided by the Board.
• The authorization entitles the Board of Directors to resolve on all the conditions of the issuance of shares and the issuance of special rights entitling to shares, including the right to deviate from the shareholders’ pre-emptive subscription right.

The authorization is in force until the next Annual General Meeting; however, no longer than until 30 June 2024, and it replaces the previous authorizations granted regarding a directed share issue and the issuance of special rights entitling to shares.

The Annual General Meeting decided that the Articles of Association be amended to enable holding a general meeting also without a meeting venue as a so-called virtual meeting, if so decided by the Board of Directors. The aforementioned amendment shall be implemented by amending § 6 of the Articles of Association, The place of the General Meeting and participation in the General Meeting.

Shares and shareholders

Share capital and number of shares
The company has one series of shares, and all shares have equal rights. At the end of the review period, Lemonsoft Oyj’s share capital consisted of 18,538,019 (18,273,726) shares. The average number of shares during the review period was 18,441,633 (18,273,726).

The company's share is traded on the First North Growth Market Finland marketplace maintained by Nasdaq Helsinki Oy. During the review period, the highest share price was EUR 9.35 and the lowest EUR 7.20. The closing price on 31 March 2023 was EUR 7.91. The market value of the company at the closing price of the review period was approximately EUR 146.6 million. Average daily trading volume during the review period was 2,159 shares (EUR 17,116).

On 31 March 2023, the company had a total of 2,466 shareholders. The company's largest shareholders can be found on the company's investor website at https://investors.lemonsoft.fi/osakkeenomistajat/.

Significant short-term risks and uncertainties

The deterioration of the economic situation and events with a global impact, such as the war in Ukraine, may have direct and indirect effects on Lemonsoft's business. These may be reflected in the business operations of Lemonsoft's customer companies, for example, in reduced investments by industrial manufacturing companies and decreased needs of subcontracting chains, as well as business and bankruptcy risks. In turn, customers' business challenges may affect Lemonsoft's new customer acquisition, upsells from existing customers, and customer retention.

In the longer term, the biggest challenge for our industry is the availability of skilled personnel. Success of the Group and opportunities for organic growth depend largely on how well we can recruit, motivate, and engage more skilled personnel and develop our expertise.

In Lemonsoft's cost structure, the single most significant factor is personnel costs, and an increase in the general price level may increase the pressure to increase personnel costs. Lemonsoft constantly monitors the development of the situation from a risk management perspective and strives to ensure the continuation of profitable growth by optimizing its cost structure and pricing.

The ERP market is generally a highly competitive market, and the industry is fragmented. Smaller players are primarily focused in a specific sector of SMEs and larger players do not compete directly for customers in the same market. However, competition in Lemonsoft's operating markets may intensify due to existing competitors or agile new entrants.

Risks related to information security and the IT systems of service providers are a significant factor affecting the security and continuity of the Group's business. Lemonsoft constantly invests in high reliability and high security systems and strives to ensure the high quality of the services it purchases by selecting leading players in the industry as its key partners. European data protection regulations may also bring unexpected risks to Lemonsoft's operating environment.

Success in acquisitions and related integration work is a key factor for Lemonsoft's growth. The company has made several acquisitions in recent years and aims to continue to grow through acquisitions. There may be unexpected risks associated with target companies and their integration into Lemonsoft.

Dividends paid

The Annual General Meeting decided on 4 April 2023 that a dividend of EUR 0.14 per share will be paid according to the confirmed balance sheet for the accounting period ending on 31 December 2022. About total of EUR 2.6 million was paid in dividends after the review period, 17 April 2023.

Events after the review period

Lemonsoft has announced on 11 April 2023 that it has switched to IFRS reporting. The company estimates that the transition to IFRS reporting will increase the comparability of financial figures with other companies in the industry and increase the interest of international investors in the company.

Outlook 2023

Lemonsoft's goal is to continue growth, both by increasing the number of software modules offered to its existing customer base and by expanding its customer base with new customer acquisition. However, the company estimates that the prevailing economic situation will have a weakening effect on new sales and the growth of the existing customer base, especially in the first half of the year.

Profit forecast for 2023

Lemonsoft keeps the profit forecast unchanged and estimates that the net sales for the financial year 2023 will increase 10-20 percent compared to the financial year 2022, and that adjusted EBIT will be 25-30 percent of net sales in 2023.

Financial information

Lemonsoft Oyj will publish the following financial information in 2023:

• Half-year Report January-June 2023 on Friday, 11 August 2023
• Interim Report January – September 2023 on Thursday, 26 October 2023

Webcast for investors and media

Lemonsoft will host a live webcast for investors and the media in English on April 28, 2023 at 1:00pm EET. The webcast can be followed online live via this link:
https://lemonsoft.videosync.fi/2023-q1-results

A recording of the event and the presentation material will be available after the event at https://investors.lemonsoft.fi/.

Lemonsoft Oyj
Board of Directors

For further information, please contact:

Kari Joki-Hollanti
CEO
kari.joki-hollanti@lemonsoft.fi
+358 44 730 9271

Alpo Luostarinen
Director, M&A and IR
alpo.luostarinen@lemonsoft.fi
+358 50 911 3507

Certified Adviser:
Danske Bank A/S, Finland Branch, +358 40 841 3052

About Lemonsoft Oyj

Lemonsoft is a Finnish software company that designs, develops and sells ERP software solutions to streamline its customers’ processes across different business lines and administration. The extensive offering of software solutions and related services enables the company to provide its customers with holistic service. The company’s standardized and scalable software solutions are delivered mainly from the cloud and are based on the SaaS model in which customers pay a monthly service fee for the use of the software. The company operates in the ERP software market primarily as a service provider for SMEs. The company’s customer base includes customers from especially industrial manufacturing, wholesale and retail, professional services automation, construction and accounting.

Get to know us better at www.lemonsoft.fi.

Distribution

Nasdaq Helsinki Oy
Principal media

TABLES SECTION

Consolidated income statement, IFRS

Consolidated balance sheet, IFRS

Consolidated cash flow statement, IFRS

Consolidated statement of changes in equity, IFRS

* Change in the additional purchase price paid to the subsidiary transferred to Retained earnings in 2022

Accounting principles

The Group's interim financial report has been prepared in accordance with IAS34 Interim Financial Reporting. The interim financial report is unaudited.

This is Lemonsoft Oyj's first interim report prepared in accordance with IFRS. The company will publish the first consolidated financial statements in accordance with IFRS for the financial year ending 31.12.2023. The Group’s date of transition to IFRS is 1 January 2022. Comparative information for previous years converted to IFRS and their changes compared to FAS reporting are presented in the IFRS Transition release 11.4.2023. This interim report of the Group should be reviewed and read together with the IFRS Transition release, which presents the effects of the IFRS transition on Lemonsoft Group.

The information in the interim report is presented in thousands of Euro, except when otherwise stated. All figures presented have been rounded, and consequently the sum of individual figures may deviate from the presented aggregate figure.

NOTES

Distribution of net sales

Goodwill and intangible assets

Tangible assets

Financial assets and liabilities

Business acquisitions

Logentia Oy
On 31 May 2022, Lemonsoft Oyj acquired the entire share capital of Logentia Oy. With the acquisition, Lemonsoft strengthens its offering in industrial manufacturing and wholesale businesses and will offer its customers more possibilities to streamline their business processes by optimizing the use of transportation services.

The purchase price of Logentia Oy's share capital was EUR 7.9 million. The purchase price consisted of a debt-free enterprise value of EUR 6.0 million and a net cash of EUR 1.9 million. 75 percent of the purchase price was paid in cash and 25 percent in new shares issued by Lemonsoft Oyj. The subscription price of the new shares transferred as consideration was EUR 12.53, based on the volume-weighted average price of the Lemonsoft Oyj’s share on 30-day period preceding the signing of the share purchase agreement. The new shares corresponded to approximately 0.66% of Lemonsoft Oyj’s current shares outstanding.

In addition, the parties agreed on a contingent consideration based on Logentia Oy's financial results for 2022-2023. The contingent additional purchase price amounts to a maximum of EUR 1.0 million, and if realized, will be paid entirely as share consideration by the end of February 2024.

Identifiable assets acquired and liabilities assumed as assets are valued at their fair values at the date of acquisition. Acquired assets include intangible assets recognized separately from goodwill, consisting of customer relationships and technology. The goodwill is based on the expected synergy benefits from the acquisition of Logentia Oy, as well as on utilising the growth of the joint sales and marketing network and expanding customer relationships within the Group. Goodwill is not deductible in taxation. Acquisition-related costs of EUR 173 thousand are included in the Other operating expenses item in the consolidated income statement.

Finazilla Oy
On 8 July 2022, Lemonsoft Oyj acquired the entire share capital of Finazilla Oy, a software company specializing in business reporting, budgeting and forecasting. In connection with the transaction, Finazilla Oy acquired the business of Finazilla Oy’s parent company, Taloushallintaan fi Oy, which offers financial process optimization and enhancement services with Finazilla’s software. With the acquisition, Lemonsoft strengthens its offering in financial management solutions by offering its customers more comprehensive tools for managing the business information from ERP systems and for financial forecasting.

The total purchase price of the acquired businesses was EUR 2.8 million. The purchase price consisted of a debt-free enterprise value of EUR 2.6 million and a net cash of EUR 0.2 million. The total purchase price was paid in cash at signing.

In addition, the parties agreed on a contingent consideration based on Finazilla Oy's net sales for 2022-2025. The contingent additional purchase price amounts to a maximum of EUR 1.5 million, and if realized, 50% of the additional purchase price will be paid in cash and 50% in new shares issued by Lemonsoft Oyj.

Identifiable assets acquired and liabilities assumed as assets are valued at their fair values at the date of acquisition. Acquired assets include intangible assets recognized separately from goodwill, consisting of customer relationships and technology. The goodwill is based on the expected synergy benefits from the acquisition of Finazilla Oy, as well as on utilising the growth of the joint sales and marketing network and expanding customer relationships within the Group. Goodwill is not deductible in taxation. Acquisition-related costs of EUR 54 thousand are included in the Other operating expenses item in the consolidated income statement.

Duunissa.fi business
On 30 November 2022, Lemonsoft Oyj acquired the work time monitoring business of Duunissa.fi. Duunissa.fi is a working time monitoring software solution developed by Korttilinna Oy, which enables logging work time via mobile or terminal stamping, working hours to be easily assigned in electronic working time monitoring, and allowances and expenses attached to work shifts to be transferred to work time accounting.

The purchase price of Duunissa.fi business was negligible, so the acquisition is not specified in the table below.

Logentia Oy's net sales were EUR 1,159 thousand and the result for the financial year was EUR 545 thousand from the date of acquisition until 31.12.2022. Finazilla Oy's net sales were EUR 780 thousand and the result for the financial year was EUR -57 thousand from the date of acquisition until 31.12.2022. Lemonsoft Group's net sales in 2022 would have been EUR 23,886 thousand and profit for the financial year EUR 5,436 thousand if the businesses acquired during the financial year had been consolidated in the consolidated financial statements from the beginning of 2022.

The following table shows the total fair values of the assets and liabilities acquired.

Events after the review period

Lemonsoft has announced on 11 April 2023 that it has switched to IFRS reporting. The company estimates that the transition to IFRS reporting will increase the comparability of financial figures with other companies in the industry and increase the interest of international investors in the company.

KEY FIGURES

Alternative performance measures

Adjusted EBITDA

Adjusted EBIT

Organic growth of net sales

Calculation of key figures

Gross Margin
Net sales + Other operating income – Materials and services

EBITDA
EBIT+ Depreciation and amortisation

Adjusted EBITDA
EBIT + Depreciation and amortisation + M&A expenses +/- Other significant non-recurring items affecting comparability

EBIT
Net sales + Other operating income – Materials and services – Employee benefit expenses – Other operating expenses – Depreciation and amortisation

Adjusted EBIT
EBIT + Amortisation of intangible assets related to business combinations + M&A expenses +/- Other significant non-recurring items affecting comparability

Equity ratio, %
Equity +/- Non-controlling interests x100 / (Balance sheet total – Advances received)

Net debt
Loans from credit institutions + Lease liabilities – Cash and cash equivalents

Gearing, %
(Loans from credit institutions + Lease liabilities – Cash and cash equivalents) x100 / Equity

Earnings per share (EPS)
Profit (loss) for the period attributable to owners of the parent company / Weighted average number of ordinary shares outstanding during the financial year

Return on invested capital (ROIC), %
(Profit (loss) for the period + Financial expenses + Tax expense) / (Equity + Loans from credit institutions + Lease liabilities)

Return on equity (ROE), %
Profit (loss) for the period / ((Equity at the beginning of the period + Equity at the end of the period) /2)

JANUARY-MARCH 2022

• Net sales increased 29.9% and were EUR 5,002 thousand (3,849)
• EBITDA was EUR 1,358 thousand (1,370), 27.1% (35.6) of net sales
• Adjusted EBITDA was EUR 1,369 thousand (1,368), 27.4% (35.6) of net sales
• EBIT was EUR 1,010 thousand (1,133), 20.2% (29.4) of net sales
• Adjusted EBIT was EUR 1,325 thousand (1,311), 26.5% (34.1) of net sales
• Profit of the review period was EUR 762 thousand (884), 15.2% (23.0) of net sales

Key Figures

*) Adjusted EBITDA is EBITDA adjusted by costs related to the acquisitions and the IPO as well as certain extraordinary items (Business Finland’s aid)
**) Adjusted EBIT is EBIT adjusted by goodwill amortizations, costs related to the acquisitions and the IPO as well as certain extraordinary items (Business Finland’s aid)
***) The share split has been considered in 2021 figures

CEO Kari Joki-Hollanti

The first quarter of 2022 developed largely in line with our expectations. The number of new customer leads and new deals were at a high level compared to last year. There were some bottlenecks in implementations, but the situation is improving. Net sales were EUR 5.0 million, growing by 29.9 % compared to Q1 2021. Our adjusted EBIT margin was at an expected level, at 26.5 %.

The number of customers continued to grow and was approximately 7,000 at the end of Q1 2022, compared to approximately 6,800 at the end of year 2021.

The trend in ERP systems has during the past years been to expand to various e-commerce solutions. We saw this development two years ago when we introduced the LemonShop product to the market. A seamlessly integrated e-commerce solution is becoming a key selection criteria when evaluating different ERP systems. Positive customer feedback encouraged us to invest more in e-commerce solutions and therefore we strengthened the unit significantly during the first quarter.

In January we released the LemonSmart solution, offered through accounting firms to micro-enterprises. LemonSmart also upgrades Lemonsoft’s product offering in the accounting sector. LemonSmart is a highly automated solution for sales and purchase invoicing, payroll, cash flow management and reporting functions. VAT declarations and other legal requirements are automatically handled by the system. Micro-enterprises have not previously been our target group, but we also want to offer them a solution, which grows with the company. LemonSmart shares the common business logic and the database with Lemonsoft ERP.

We will also actively continue to evaluate possible acquisition targets in several interesting industries and product areas.

Our second quarter is busy, and there are more implementations ongoing than before. General interest towards ERP systems seems to remain high despite the current uncertain geopolitical situation.

Group Financial Development

Group financial result and profitability

January-March 2022
Net sales for the review period were EUR 5,002 thousand (3,849). Net sales increased by EUR 1,153 thousand, 29.9%. Organic growth of the review period was 9.1%. The comparison period included exceptionally high license sales, which shows as lower organic growth of the review period. Net sales grew especially due to new customer acquisition, previous year’s acquisitions of Metsys Oy and PlanMill Oy and the asset purchase of Talosofta. Out of these, the net sales of Metsys Oy were not included in the comparison period in January and the net sales of PlanMill Oy and Talosofta were not included at all in the comparison period’s net sales.

The share of SaaS income during the review period was 77.6% (72.4), the share of transaction income 5.6% (6.5), and consulting and other income 16.8% (21.1).

EBITDA was EUR 1,358 thousand (1,370), 27.1% (35.6) of net sales. Adjusted EBITDA (adjustments specified in the table EBITDA and EBIT Adjustments) was EUR 1,369 thousand (1,368), 27.4% (35.6) of net sales. According to expectations, adjusted EBITDA of the review period was affected by increased salary costs due to recruitments and higher other operating expenses mainly due to IPO related, new running cost items.

EBIT was EUR 1,010 thousand (1,133), 20.2% (29.4) of net sales. Adjusted EBIT (adjustments specified in the table EBITDA and EBIT Adjustments) was EUR 1,325 thousand (1,311), 26.5% (34.1) of net sales. According to expectations, adjusted EBIT of the review period was affected by increased salary costs due to recruitments and higher other operating expenses mainly due to IPO related, new running cost items.

Profit for the review period was EUR 762 thousand (884), 15.2% (23.0) of net sales.

Cash flow from operating activities during the review period was EUR 798 thousand (1,286).

Balance sheet, financing and investments
The balance sheet total at the end of the review period was EUR 29,988 thousand (29,798 at the end of the year 2021).

The Group has not capitalized any R&D costs during the review period or the comparison period.

Equity at the end of the review period was EUR 22,753 thousand (21,991 at the end of the year 2021), equity increased EUR 762 thousand.

Equity ratio at the end of the review period was 77.5% (75.0 at the end of the year 2021) and interest-bearing debt was EUR 3,300 thousand (3,300 at the end of the year 2021).

Cash and cash equivalents at the end of the review period were EUR 19,749 thousand (19,060 at the end of the year 2021).

Personnel, management and administration

The Group number of employees was 158 (118) on 31 March 2022. Recruitments of the review period have strengthened the R&D and Customer service functions.

The personnel are divided as follows:

• R&D 88 employees
• Customer service 38 employees
• Sales 14 employees
• Other functions, a total of 18 employees

Annual General Meeting

Lemonsoft Oyj’s Annual General Meeting was held on 5 April 2022 in Helsinki with exceptional arrangements without the presence of shareholders or their representatives. The Annual General Meeting adopted the financial statements for the year 2021 and discharged the members of the Board of Directors and the CEO from liability for the last financial year.

The Annual General Meeting elected five members to the Board of Directors; Christoffer Häggblom, Michael Richter, Kari Joki-Hollanti, Saila Miettinen-Lähde and Ilkka Hiidenheimo. The Board elected Christoffer Häggblom as Chairman from among its members. The Annual General Meeting decided that the Chairman of the Board will be paid EUR 3,000 per month and the ordinary members of the Board EUR 1,500 per month as a remuneration.

The Annual General Meeting decided that KPMG will continue as the company's auditor. Kim Järvi, Authorized Public Accountant, will continue as the responsible auditor appointed by the audit firm. It was decided to pay the auditor fees according to the reasonable invoice.

The Annual General Meeting decided to establish an Audit Committee. Chairman of the Audit Committee will be paid EUR 1,000 per meeting and the members of the Committee EUR 500 per meeting as a remuneration. Board of Directors elected, in its Inaugural Board Meeting after the Annual General Meeting, Saila Miettinen-Lähde as Chairman of the Audit Committee, and Michael Richter as a member.

The Annual General Meeting decided to establish a Shareholders' Nomination Board. The duties of the Nomination Board will be e.g. to prepare proposals for the Annual General Meeting regarding the election of Board members and the remuneration of members of the Board and Board committees. The Nomination Board consists of three members who are the company's three largest shareholders or their nominated representatives. The Chairman of the Board of Directors would act as an expert member of the Nomination Board, unless he is a member of the Nomination Board on other grounds (when acting as an expert member, the Chairman of the Board would not be an official member of the Nomination Board and would not have voting rights).

The Annual General Meeting authorized the Board to decide on an ordinary or bonus issue of shares and the granting of special rights. The maximum total number of shares to be issued by virtue of the authorization is 2,000,000 shares. The authorization applies to both new shares and treasury shares held by the company. The authorization entitles the Board of Directors to resolve on all the conditions of the issuance of shares and the issuance of special rights entitling to shares, including the right to deviate from the shareholders’ pre-emptive subscription right.

The authorization is in force until the next Annual General Meeting, however, no longer than until 30 June 2023, and it replaces the previous authorizations granted regarding a directed share issue and issuance of special rights entitling to shares.

Shares and shareholders

Share capital and number of shares
The company has one series of shares, and all shares have equal rights. At the end of the review period, Lemonsoft Oyj’s share capital consisted of 18,273,726 (680) shares. The average number of shares during the review period was 18,273,726 (680). The share split has been considered in the number of shares.

The company's share is traded on the First North Growth Market Finland marketplace maintained by Nasdaq Helsinki Oy. During the review period, the highest share price was EUR 18.00 and the lowest EUR 11.04. The closing price on 31 March 2022 was EUR 13.05. The market value of the company at the closing price of the review period was approximately EUR 238.5 million. Average daily trading volume during the review period was 13,471 shares (EUR 201,203).

On 31 March 2022, the company had a total of 2,615 shareholders. The company's largest shareholders can be found on the company's investor website at https://investors.lemonsoft.fi/osakkeenomistajat/.

Significant short-term risks and uncertainties

The biggest challenge for our industry is the availability of skilled personnel. To maintain strong growth, Lemonsoft is investing heavily in recruiting employees with strong expertise. Success of the Group and opportunities for organic growth depend largely on how well we can recruit, motivate, and engage more skilled personnel and maintain and develop our expertise.

Possible weakening of the business of the Group's customer companies could result in e.g. reduced investments by industrial manufacturing companies and decreased need for subcontracting chains. This could also have a negative impact on the demand for ERP systems, which could slow down the development of the Group’s new sales and upselling potential to the existing customer base.

In addition to the Covid-19 pandemic, globally affecting conflicts like the war in Ukraine could also have direct and indirect impacts on Lemonsoft’s business. These could also pose business and bankruptcy risks to the Lemonsoft’s customers, which in turn may affect the Group’s business and cash position. Lemonsoft constantly monitors the development of the situation from a risk management perspective.

The ERP market is generally a highly competitive market, and the industry is fragmented. Smaller players are primarily focused in a specific sector of SMEs and larger players do not compete directly for customers in the same market. However, competition in Lemonsoft's operating markets may intensify due to existing competitors or agile new entrants.

Risks related to information security and the IT systems of service providers are a significant factor affecting the security and continuity of the Group's business. Lemonsoft constantly invests in high reliability and high security systems and strives to ensure the high quality of the services it purchases by selecting leading players in the industry as its key partners. European data protection regulations may also bring unexpected risks to Lemonsoft's operating environment.

Success in acquisitions and related integration work is a key factor for Lemonsoft's growth. The company has made several acquisitions in recent years and aims to continue to grow through acquisitions. There may be unexpected risks associated with target companies and their integration into Lemonsoft.

Board of Director’s proposal for dividend

The Annual General Meeting decided that a dividend of EUR 0.13 per share will be paid according to the confirmed balance sheet for the accounting period ending on 31 December 2021. About total of EUR 2,4 million was paid in dividends after the review period, 20 April 2022.

Events after the review period

There were no significant events after the review period.

Outlook 2022

Lemonsoft's goal is to continue steady growth, both by increasing the number of software modules offered to its existing customer base and by expanding its customer base with new customer acquisition.

Digitalization and increasing use of ERP systems in the Group's potential customer base is expected to continue, especially in the construction industry and in industrial manufacturing and logistics. ERP is a key system for management and continuation of a customer's business, based on which customer retention is also expected to remain at the current high level.

Recruitments made in the second half of 2021 and during the review period will weaken relative profitability in the first half of 2022 compared to the second half.

Profit forecast for 2022

We keep the previous profit forecast for 2022 unchanged. We estimate that the net sales for the financial year 2022 will increase by 23-28 percent compared to the financial year 2021, and that adjusted EBIT will be 30-35 percent of net sales in 2022.

Financial information

Lemonsoft Oyj will publish the following financial information in 2022:

• Half-year Report January-June 2022 on Friday, 22 July 2022
• Interim Report January – September 2022 on Friday, 28 October 2022

Webcast for investors and media

Lemonsoft will host a live webcast for investors and the media in English on April 27, 2022 at 2:00pm EET. The webcast can be followed online live via this link: https://lemonsoft.videosync.fi/2022-q1-results

A recording of the event and the presentation material will be available after the event at https://investors.lemonsoft.fi/.

Lemonsoft Oyj
Board of Directors

For further information, please contact:

Kari Joki-Hollanti
CEO
kari.joki-hollanti@lemonsoft.fi
+358 44 730 9271

Alpo Luostarinen
Director, M&A and IR
alpo.luostarinen@lemonsoft.fi
+358 50 911 3507

Certified Adviser:
Danske Bank A/S, Finland Branch, +358 40 841 3052

About Lemonsoft Oyj

Lemonsoft is a Finnish software company that designs, develops and sells ERP software solutions to streamline its customers’ processes across different business lines and administration. The extensive offering of software solutions and related services enables the company to provide its customers with holistic service. The company’s standardized and scalable software solutions are delivered mainly from the cloud and are based on the SaaS model in which customers pay a monthly service fee for the use of the software. The company operates in the ERP software market in Finland primarily as a service provider for SMEs. The company’s customer base includes customers from especially industrial manufacturing, wholesale and retail, professional services automation, construction and accounting.

Get to know us better at www.lemonsoft.fi.

Distribution

Nasdaq Helsinki Oy
Principal media

TABLES

Accounting principles for the review period

The figures have been prepared in accordance with Finnish Accounting Standards (FAS).

The figures of the review period are unaudited.

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED CASH FLOW STATEMENT

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

* Earnings from subsidiary mergers transferred to Retained earnings in 2021

GROUP’S COMMITMENTS

*The value of cash pledges corresponds to the purchase price of the pledged real estate shares

CALCULATION OF KEY FIGURES

Gross margin = Net sales + Other operating income – Materials and services

EBITDA = EBIT + Depreciation and amortization

Adjusted EBITDA = EBIT + Depreciation and amortization – Business Finland’s aid + M&A costs + IPO costs

Operating profit (EBIT) = Net sales + Other operating income – Materials and services – Personnel expenses – Other operating expenses – Depreciation and amortization

Adjusted EBIT = EBIT – Business Finland’s aid + M&A costs + IPO costs + Goodwill amortization

Equity ratio, % = Equity +/- Minority interest x100 / (Balance sheet total – Advances received)

Gearing, % = (Interest-bearing liabilities – Cash at bank and in hand) x100 / Equity

Net debt = Loans from credit institutions – Cash at bank and in hand

Earnings per share (EPS) = Profit (Loss) of the period / Adjusted average number of outstanding shares during the period

EBITDA AND EBIT ADJUSTMENTS