Panostaja Oyj Business Review Q1 1.11.2021-31.1.2022
Panostaja Oyj Business Review Q1 March 15, 2022 10.00 a.m.
Panostaja Oyj’s Business Review
A quarter characterized by reinvention and a new success story – long-developed SokoPro business sold for more than MEUR 45
November 2021-January 2022 (3 months) in brief:
- Net sales increased in all four segments. Net sales for the Group as a whole increased by 6.5% to MEUR 35.8 (MEUR 33.6).
- EBIT improved for three of the four segments. The entire Group’s EBIT improved from the reference period, standing at MEUR -0.9 (MEUR -1.1).
- Grano’s net sales for the review period increased by 6% from the reference period in the previous year. EBIT totaled MEUR 0.3 (MEUR -0.1).
- Earnings per share (undiluted) were -1.3 cents (-3.4 cents).
- Panostaja segment Grano signed an agreement on selling its SokoPro business operations to the international iBinder company. The deal was carried out after the review period in February 2022 as a share transaction, and the purchase price of the shares was roughly MEUR 45.5.
CEO Tapio Tommila:
“In the first quarter, Panostaja once again took strides in its efforts to reform its operations. Our largest segment Grano completed a strategically important divestment of the SokoPro business, which had been developed successfully over a long period of time. In the first quarter, we also published our updated strategy for 2022-2024, which involves Panostaja focusing on investments in service and software companies and building the best concentration of capital investment expertise and a network of advisers for the chosen sectors.
The aim of the sector-specific focus of Panostaja’s updated strategy is to boost competitiveness with regard to new investments and the development of our existing segments. In the strategy period, we will aim to widen our investment portfolio with several new investments in the service and software sectors, where development is supported by clear growth trends. These investments will balance our portfolio and ensure diversification against risks related to sector-specific and general trends. The efforts to build the updated network of advisors, which will be linked tightly to Panostaja’s core team, is off to a good start, and I am very excited to put our new operating model to work during the second quarter.
Our updated strategy also draws heavily from Panostaja’s experience in building success stories in these specific sectors. The latest demonstration of our expertise is the divestment of Grano’s SokoPro business, which was published in the first quarter. We purchased SokoPro in 2009 in conjunction with the acquisition of Grano’s Sokonet Oy. During our ownership, the small project bank software that supported CAD printouts was developed into a modern cloud-based SaaS service, which is the clear market leader in Finland as a digital asset management solution for construction. The deal provides the best possible foundation for continuing the strong development of the divested SokoPro business under new ownership and strengthening Grano’s strategic focus on becoming a service provider supplying comprehensive solutions that generate added value in marketing communications.
In the first quarter, all of our segments expanded their business operations, even though the accelerated propagation of the Omicron variant during the quarter slowed down the normalization of the demand environment and presented a variety of challenges in the form of increased absences, for example. Panostaja Group’s net sales increase of more than 6% was a good accomplishment, and it was important to secure growth on a wide scale across all segments. However, our segments will continue their hard work on implementing the growth strategies. The first quarter did not yet meet our expectations in every regard. In the first quarter, profitability primarily developed in the right direction and EBIT increased in three of the four segments. That said, challenges were caused by many factors, such as the sharp increase in material prices in Grano’s business and the exceptionally high absence rates in Hygga’s clinic business as a result of the Omicron variant. Oscar Software growth investments that impacted growth weakened profitability. At CoreHW, customer project activity and, by extension, profitability saw clear positive development.
After the review period, the global situation has suddenly become more uncertain as a result of Russia’s invasion of Ukraine. The crisis does not directly impact the business of our segments, but the long-term effects of the war and related economic sanctions are difficult to anticipate and they can also have negative impacts on the operating environments of our segments.”
| Key Figures MEUR | Q1 | Q1 | 12 months |
| 11/21- 1/22 | 11/20- 1/21 | 11/20- 10/21 | |
| Net sales, MEUR | 35.8 | 33.6 | 133.0 |
| EBIT, MEUR | -0.9 | -1.1 | 2.0 |
| Profit before taxes, MEUR | -1.4 | -1.8 | 0.0 |
| Profit/loss for the financial period, MEUR | -0.9 | -2.5 | -1.0 |
| Distribution: | |||
| Shareholders of the parent company | -0.7 | -1.8 | -1.7 |
| Minority shareholders | -0.2 | -0.7 | 0.7 |
| Earnings per share, undiluted (EUR) | -0.01 | -0.03 | -0.03 |
| Interest-bearing net liabilities | 59.8 | 66.2 | 56.3 |
| Gearing ratio, % | 90.9 | 97.0 | 83.1 |
| Equity ratio, % | 38.2 | 34.3 | 37.2 |
| Equity per share (EUR) | 0.74 | 0.78 | 0.75 |
| Division of the net sales by segment MEUR | Q1 | Q1 | 12 months |
| Net sales | 11/21- 1/22 | 11/20- 1/21 | 11/20- 10/21 |
| Grano | 28.9 | 27.3 | 107.9 |
| Hygga | 2.0 | 1.9 | 8.1 |
| CoreHW | 2.0 | 1.6 | 6.1 |
| Oscar Software | 2.9 | 2.8 | 11.0 |
| Others | 0.0 | 0.0 | 0.0 |
| Eliminations | 0.0 | 0.0 | -0.1 |
| Group in total | 35.8 | 33.6 | 133.0 |
| Division of EBIT by segment MEUR | Q1 | Q1 | 12 months |
| EBIT | 11/21- 1/22 | 11/20- 1/21 | 11/20- 10/21 |
| Grano | 0.3 | -0.1 | 5.6 |
| Hygga | -0.2 | -0.3 | -0.2 |
| CoreHW | -0.2 | -0.4 | -1.4 |
| Oscar Software | -0.1 | 0.2 | 0.3 |
| Others | -0.6 | -0.6 | -2.2 |
| Group in total | -0.9 | -1.1 | 2.0 |
Panostaja Group’s business operations for the current review period are reported in five segments: Grano, Hygga, CoreHW, Oscar Software and Others (parent company and associated companies).
One associated company, Gugguu Group Oy, provided a report for the review period. The impact on profit/loss of the reported associated companies in the review period was MEUR -0.0 (MEUR -0.1), which is presented in a separate row in the consolidated income statement.
In the review period, Panostaja sold Carrot Palvelut Group Oy’s shares to the owners of the company who are actual persons. As a result of the deal, Panostaja’s holding in Carrot Palvelut Group Oy decreased to 19% and the Carrot segment was removed from Panostaja’s group-level reporting.
Outlook for the 2022 Financial Period
As regards the corporate acquisition market, plenty of opportunities are available and the market is active.The need to leverage ownership arrangements and growth opportunities will persist for SMEs, but the high market liquidity and increased price expectations of sellers are making the operating environment more challenging for corporate acquisitions.We will continue exploring new possible investment targets in accordance with our strategy and assess divestment possibilities as part of the ownership strategies of the investment targets.
It is thought that the demand situation for different investments will develop in the short term as follows:
• Oscar Software’s demand will remain good.
• The demand for Grano, Hygga and CoreHW will remain satisfactory.
The demand information presented above involves uncertainties relating to the possible escalation of the COVID-19 pandemic and any economic impacts of the war in Ukraine, which are difficult to anticipate. The escalation of the pandemic may impact the future development of Grano and Hygga, in particular, and rapidly and dramatically change the estimate provided above. The effects of the war in Ukraine and the related economic sanctions will increase economic uncertainty in Finland and abroad, which may negatively impact segment demand or the availability of materials, and thereby material prices and delivery capabilities.
Panostaja Oyj
Board of Directors
For further information, contact CEO Tapio Tommila, +358 (0)40 527 6311
Panostaja Oyj
Tapio Tommila
CEO
All forecasts and assessments presented in this business report are based on the current outlook of Panostaja and the views of the management of the various investments with regard to the state of the economy and its development. The results attained may be substantially different.
This is not an interim report compliant with the IAS 34 standard. The company observes the six-monthly reporting practice prescribed in the Finnish Securities Markets Act and publishes business reports for the initial three and nine months of each year, presenting the key information on the company’s financial development. The financial information presented in the business report has not been audited.
Panostaja is an investment company developing Finnish companies in the growing service and software sectors as an active shareholder. The company aims to be the most sought-after partner for business owners selling their companies as well as for the best managers and investors. Together with its partners, Panostaja increases the Group's shareholder value and creates Finnish success stories.
Panostaja has a majority holding in four investment targets. Grano Oy is the most versatile expert of content services in Finland. Hygga Oy is a company providing health care services and the ERP system for health care providers. CoreHW provides high added value RF IC design services. Oscar Software provides ERP systems and financial management services.
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