APRIL – JUNE 2024, IFRS
- Net sales increased 14.0% and were EUR 7,027 thousand (6,163)
- EBITDA was EUR 1,578 thousand (1,487), 22.5% (24.1) of net sales
- Adjusted EBITDA was EUR 1,592 thousand (1,701), 22.7% (27.6) of net sales
- EBIT was EUR 1,153 thousand (1,191), 16.4% (19.3) of net sales
- Adjusted EBIT was EUR 1,343 thousand (1,527), 19.1% (24.8) of net sales
- Profit of the review period was EUR 739 thousand (998), 10.5% (16.2) of net sales
JANUARY – JUNE 2024, IFRS
- Net sales increased 15.3% and were EUR 13,924 thousand (12,082)
- EBITDA was EUR 2,976 thousand (3,099), 21.4% (25.7) of net sales
- Adjusted EBITDA was EUR 2,992 thousand (3,320), 21.5% (27.5) of net sales
- EBIT was EUR 2,095 thousand (2,552), 15.0% (21.1) of net sales
- Adjusted EBIT was EUR 2,462 thousand (2,991), 17.7% (24.8) of net sales
- Profit of the review period was EUR 1,336 thousand (1,947), 9.6% (16.1) of net sales
Key Figures, IFRS
| EUR 1,000 | 4-6/2024 | 4-6/2023 | Change | 1-6/2024 | 1-6/2023 | Change | 1-12/2023 |
| Net sales | 7,027 | 6,163 | 14.0 % | 13,924 | 12,082 | 15.3 % | 26,344 |
| SaaS | 5,013 | 4,635 | 8.1 % | 9,966 | 9,141 | 9.0 % | 19,146 |
| Transaction | 848 | 428 | 98.0 % | 1,615 | 715 | 126.0 % | 2,265 |
| Consulting and other | 1,165 | 1,100 | 5.9 % | 2,344 | 2,226 | 5.3 % | 4,933 |
| | | | | | | |
| Gross margin* | 6,081 | 5,342 | 13.8 % | 11,978 | 10,505 | 14.0 % | 22,792 |
| Gross margin, % of net sales | 86.5 % | 86.7 % | | 86.0 % | 87.0 % | | 86.5 % |
| EBITDA | 1,578 | 1,487 | 6.1 % | 2,976 | 3,099 | -4.0 % | 8,215 |
| EBITDA, % of net sales | 22.5 % | 24.1 % | | 21.4 % | 25.7 % | | 31.2 % |
| Adjusted EBITDA | 1,592 | 1,701 | -6.4 % | 2,992 | 3,320 | -9.9 % | 7,951 |
| Adjusted EBITDA, % of net sales | 22.7 % | 27.6 % | | 21.5 % | 27.5 % | | 30.2 % |
| EBIT | 1,153 | 1,191 | -3.2 % | 2,095 | 2,552 | -17.9 % | 6,890 |
| EBIT, % of net sales | 16.4 % | 19.3 % | | 15.0 % | 21.1 % | | 26.2 % |
| Adjusted EBIT | 1,343 | 1,527 | -12.1 % | 2,462 | 2,991 | -17.7 % | 7,195 |
| Adjusted EBIT, % of net sales | 19.1 % | 24.8 % | | 17.7 % | 24.8 % | | 27.3 % |
| Profit (Loss) of the period | 739 | 998 | -25.9 % | 1,336 | 1,947 | -31.4 % | 5,349 |
| Profit (Loss) of the period, % of net sales | 10.5 % | 16.2 % | | 9.6 % | 16.1 % | | 20.3 % |
| | | | | | | |
| Equity ratio, % | 63.3 % | 56.1 % | | 63.3 % | 56.1 % | | 61.9 % |
| Net debt | 2,459 | 1,337 | 83.9 % | 2,459 | 1,337 | 83.9 % | 1,010 |
| Gearing, % | 8.4 % | 5.0 % | | 8.4 % | 5.0 % | | 3.3 % |
| Earnings per share (EPS) | 0.04 | 0.05 | -23.5 % | 0.08 | 0.10 | -26.7 % | 0.29 |
| Return on invested capital, % (ROIC) | 3.2 % | 3.3 % | | 5.9 % | 7.1 % | | 18.1 % |
| Return on equity, % (ROE) | 2.5 % | 3.7 % | | 4.5 % | 7.3 %
% | | 18.9 % |
| Number of employees at the end of the period | 220 | 220 | 0.0 % | 220 | 220 | 0.0 % | 208 |
| Outstanding shares at the end of the period | 18,579,991 | 18,562,005 | | 18,579,991 | 18,562,005 | | 18,562,005 |
| Average outstanding shares during the period | 18,579,991 | 18,546,014 | | 18,570,998 | 18,493,824 | | 18,527,914 |
*The calculation of key figures has been changed for other operating income and the comparison periods have been changed accordingly.
Interim CEO Kari Joki-Hollanti
During the second quarter of the year, we have taken several steps forward in our business. Our net sales were 7.0 M€, the growth in net sales was 14% and the organic growth in net sales was 1.4%. Adjusted EBIT was 1.3 M€ and the adjusted EBIT margin was 19.1%. Although the organic growth could be greater, we are on the right course. We expect profitability to develop in a positive direction during the second half of the fiscal year.
We have launched several new products to the market, one of which is shift planning software Rosteri, designed to serve shift planning needs regardless of the customer's industry sector. For manufacturing customers, Rosteri provides tools for e.g. production machine resourcing and capacity planning. During the second quarter we have also launched our subsidiary Finvoicer‘s invoice lifecycle-management services to Lemonsoft customers in an easily usable format.
We completed two acquisitions right after the end of the review period. Atmotics Oy’s product Spotilla provides us with a modern maintenance and field service management solution. Many of our customers have needs for maintenance and field service management not just in their own businesses, but also for providing after-sales services to their customers. With Spotilla’s modern software we can offer a more comprehensive package of solutions to maintenance and field service management. Applirent complements our existing solutions with rental and fleet management solutions. Applirent has approximately 100 customers in the SME sector, which mainly serve manufacturing and construction industries in their own businesses. We are reinforcing Applirent’s rental business focused solution with Lemonsoft’s ERP solutions and Finvoicer’s invoice lifecycle solutions. Along with Spotilla's and Applirent's teams we gained high-level expertise to serve Lemonsoft’s key customers in wholesale and industrial manufacturing.
After several acquisitions, we have invested to our personnel team spirit. In June, we organized an off-site summer event for the entire personnel and also increased the time that teams are spending together. We have combined several business premises in Turku, Tampere, Helsinki and Oulu and improved our personnel benefits based on the wishes of the personnel. These following actions and improvements have affected positively in our employee satisfaction measurements. The foundation for our growth and customer satisfaction is built by our personnel, whose well-being we strive to invest in also in the future.
We have initiated significant measures to boost our sales and marketing. The Group’s sales and marketing functions are combined as one and cross-selling is part of our ordinary sales. We have also strengthened our sales and marketing operations with new recruits. We are currently systematically developing the beginning of the customer journey from attracting new customers all the way to deployment, while also improving collaboration between sales and marketing functions. Customers are still cautious in ERP procurement and decisions are being postponed, but I believe that demand will recover towards the end of the year.
Group Financial Development
Group financial result and profitability
April – June 2024
Net sales for the review period were EUR 7,027 thousand (6,163). Net sales increased by EUR 864 thousand, 14.0%. Organic growth of the review period was 1.4%, but organic growth of the recurring revenue was clearly higher than this. Consulting and other income remained at the lower level than in the comparison period. Net sales increased mainly due to the acquisition of Finvoicer Group Oy (2023), whose net sales were not included in the comparison period in April and May.
The share of SaaS income was 71.3% (75.2), the share of transaction income 12.1% (6.9), and consulting and other income 16.6% (17.8).
EBITDA was EUR 1,578 thousand (1,487), 22.5% (24.1) of net sales. Adjusted EBITDA (adjustments specified in the Alternative performance measures section) was EUR 1,592 thousand (1,701), 22.7% (27.6) of net sales. EBITDA and adjusted EBITDA were lower than the comparison period due to the timing of certain development projects.
EBIT was EUR 1,153 thousand (1,191), 16.4% (19.3) of net sales. Adjusted EBIT (adjustments specified in the Alternative performance measures section) was EUR 1,343 thousand (1,527), 19.1% (24.8) of net sales. EBIT and adjusted EBIT were lower than the comparison period due to the timing of certain development projects.
Profit for the review period was EUR 739 thousand (998), 10.5% (16.2) of net sales.
Cash flow from operating activities was EUR 1,102 thousand (783).
January – June 2024
Net sales for the review period were EUR 13,924 thousand (12,082). Net sales increased by EUR 1,843 thousand, 15.3%. Organic growth of the review period was 0.2%, but organic growth of the recurring revenue was clearly higher than this. Consulting and other income remained at the lower level than in the comparison period. Net sales increased mainly due to the acquisition of Finvoicer Group Oy (2023), whose net sales were not included in the comparison period in January – May.
The share of SaaS income was 71.6% (75.7), the share of transaction income 11.6% (5.9), and consulting and other income 16.8% (18.4).
EBITDA was EUR 2,976 thousand (3,099), 21.4% (25.7) of net sales. Adjusted EBITDA (adjustments specified in the Alternative performance measures section) was EUR 2,992 thousand (3,320), 21.5% (27.5) of net sales. EBITDA and adjusted EBITDA were lower than the comparison period due to the timing of certain development projects and termination agreement with the CEO.
EBIT was EUR 2,095 thousand (2,552), 15.0% (21.1) of net sales. Adjusted EBIT (adjustments specified in the Alternative performance measures section) was EUR 2,462 thousand (2,991), 17.7% (24.8) of net sales. EBIT and adjusted EBIT were lower than the comparison period due to the timing of certain development projects and termination agreement with the CEO.
Profit for the review period was EUR 1,336 thousand (1,947), 9.6% (16.1) of net sales.
Cash flow from operating activities was EUR 2,679 thousand (2,261).
Balance sheet, financing and investments
The balance sheet total at the end of the review period was EUR 45,884 thousand (48,885 at the end of the year 2023).
The Group has capitalized development expenses of EUR 428 thousand during the year 2024 (973 thousand during the comparison period 2023). At the end of the review period, the Group's balance sheet included capitalized development expenses totaling EUR 2,569 thousand (2,352 at the end of the year 2023).
Total equity was EUR 29,174 thousand (30,422 at the end of the year 2023), equity decreased EUR 1,247 thousand due to the dividend payment.
Equity ratio was 63.3% (61.9 at the end of the year 2023) and interest-bearing debt was EUR 7,831 thousand (8,399 at the end of the year 2023).
Cash and cash equivalents at the end of the review period were EUR 5,372 thousand (7,389 at the end of the year 2023).
Personnel
The Group’s number of employees was 220 (220) on 30 June 2024. We reported our Group personnel as follows:
- R&D 99 employees
- Customer functions 108 employees
- Other functions, a total of 13 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. 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 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 18,579,911 (18,562,005) shares. The average number of outstanding shares during the review period April – June was 18,579,991 (18,546,014).
The company's share is traded on the First North Growth Market Finland marketplace maintained by Nasdaq Helsinki Oy. During the review period April – June, the highest share price was EUR 6.78 and the lowest EUR 5.38. The closing price on 30 June 2024 was EUR 6.35. The market value of the company at the closing price of the review period was approximately EUR 118.0 million. Average daily trading volume during the review period was 24,944 shares (EUR 141,494).
On 30 June 2024, the company had a total of 2,439 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.
Lemonsoft Oyj's Board of Directors has decided on June 29, 2024 directed share issue and deviation from the shareholders' preemptive right based on the authorization given by the Annual General Meeting on 9 April 2024.The share issue is related to the acquisition of Applirent Oy, which Lemonsoft announced on July 1, 2024. New shares a total of 91,341 (570 thousand euros) are being registered in the trade register. As a result of the share issue, the total number of Lemonsoft Oyj’s outstanding shares increased to 18,671,632 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 on 22 April 2024.
Events after the review period
On 1 July, 2024, Lemonsoft Oyj acquired the entire share capital of Atmotics Oy, a software company focused on maintenance and field service management. With the acquisition, Lemonsoft strengthens its offering for industrial manufacturing customers and will offer more possibilities to streamline their business processes.
Also on 1 July, 2024, Lemonsoft Oyj acquired the entire share capital of Applirent Oy, a software company specializing in rental industry and fleet management ERP solutions. Through this acquisition, Lemonsoft expands its offering to meet the needs of the rental business and will offer more possibilities to streamline their business processes.
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. However, we expect organic growth continue to develop positively during the second half of the year.
Profit forecast for 2024 (unchanged)
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:
- Interim Report January – September 2024 on Tuesday, 5 November 2024
Lemonsoft Oyj
Board of Directors
Distribution
Nasdaq Helsinki Oy
Principal media