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Viria Plc’s business report 1 January–30 September 2020: Revenue grew and operational profitability improved year-on-year


July-September in brief

  • In Q3, revenue was EUR 24.0 million (2019: EUR 23.0 million), change +4.4 %
  • Adjusted EBITDA was EUR 1.5 million (EUR 1.2 million) or 6.3% (5.3%) of revenue
  • Adjusted EBITA was EUR 1.0 million (EUR 0.7 million), or 4.2% (2.9%) of revenue
  • The adjusted loss for the period was EUR -0.9 million (EUR -1.3 million)
  • Earnings per share were EUR -0.18 (EUR -0.24)

January-September in brief

  • Viria Group’s revenue was EUR 76.3 million (EUR 74.6 million), change +2.2%
  • Adjusted EBITDA was EUR 3.9 million (EUR 3.4 million), or 5.2% (4.6%) of revenue
  • Adjusted EBITA was EUR 2.4 million (EUR 1.8 million), or 3.1% of revenue
  • The adjusted loss for the period was EUR -3.7 million (EUR -1,6 million)
  • Earnings per share were EUR -0,72 (EUR -0,28)

Medium-term financial targets

In the next few years, Viria seeks growth. The company’s view is that this growth will be driven especially by the strong digitalisation development in society and the increasing need for cyber security services. In its strategy, Viria emphasises the growth of revenue and also expects revenue growth to contribute to the increase of the adjusted EBITDA in the medium term.

Outlook for 2020

Viria updates its previously issued outlook of the company’s financial performance in 2020.
Viria estimates that its 2020 revenue and adjusted EBITDA will be at the previous year’s level or slightly below.
The previous outlook issued on 29 April 2020 was as follows:
Viria estimates that its 2020 revenue and adjusted EBITDA will be lower than in the previous year due to the restrictions imposed and the economic slowdown caused by the pandemic. The company will provide an update on its outlook when the situation normalises so that market developments can be assessed.

Key figures

  7-9/2020 7-9/2019 1-9/2020 1-9/2019 1-12/2019
Revenue, EUR 1,000 24,025 23,016 76,262 74,587 103,104
Revenue, change, % 4.4 -14.0 2.2 -6.5 -1.7
EBITDA 1,367 1,158 3,566 3,610 5,598
Adjusted EBITDA, EUR 1,0001 1,504 1,212 3,929 3,416 5,492
EBITA, EUR 1,000 866 618 2,031 1,996 1,723
EBITA, % 3.6 2.7 2.7 2.7 1.7
Adjusted EBITA, EUR 1,0001 1,003 673 2,394 1,801 3,315
Adjusted EBITA, %1 4.2 2.9 3.1 2.4 3.2
Operating profit (EBIT), EUR 1,000 -973 -1,127 -3,418 -3,183 -5,201
Adjusted operating profit (EBIT), EUR 1,0001 -837 -1,072 -3,055 -3,378 -3,609
Profit for the period, EUR 1,000 -1,014 -1,298 -3,995 -1,460 10,859
Adjusted profit for the period, EUR 1,0001 -905 -1,254 -3,704 -1,629 12,459
Balance sheet, EUR 1,000     136,999 135,521 152,512
Equity-to-assets ratio, %     81,4 78,8 78,7
Earnings per share (EPS), EUR2 -0.18 -0.24 -0.72 -0.28 2.04
Book value of parent company’s equity per share, EUR2     22 21 23
Average number of employees (FTE) 718 700 714 692 693

1 The adjusted EBITDA, the adjusted EBITA, the adjusted operating profit (EBIT) and the adjusted profit for the period are calculated by excluding capital gains/losses arising from the disposal of properties, fixed asset shares and businesses, insurance and other compensations and other adjustments from the respective reported figure.
2 The own shares owned by the Group are excluded from the total number of shares

CEO Mika Vihervuori:

Viria’s revenue increased year-on-year in the third quarter. In July–September, the Group’s revenue was 4.4% higher than in the corresponding period last year, and revenue for the year to date rose to EUR 76.3 million. Growth is driven particularly by Viria’s security business, which has continued its long-term organic growth in spite of the COVID-19 pandemic and the resulting restrictions. The growth and profitability improvement of the IPTV technology company Hibox Systems Oy has also been strong, although a few hotel clients reduced their service purchases in the spring due to the pandemic.
Viria’s operational profitability has developed favourably. Adjusted EBITDA improved by 15% year-on-year during the first three quarters, mainly due to improved operational efficiency.
Operating profit was reduced by the amortisation of consolidated goodwill from the acquisitions made in recent years, in addition to which the result for the period under review was weighed down by the unrealised impairment of investment portfolios. The result for January–September 2019 was increased by dividends of EUR 1.1 million paid out by DNA.
The use of digital services has increased and expanded to new categories during the COVID-19 pandemic. This has created strong demand for the digitalisation and cyber security solutions produced by Viria. It has been pleasing to see that many companies have started their digitalisation projects by using service design to ensure service functionality with regard to the customer experience and internal processes. There is also growing demand for services that make use of artificial intelligence and predictive analytics.
At the same time, the uncertainty caused by the pandemic is reflected in caution among customers, particularly with regard to starting major projects. The waves of the epidemic have been reflected in sales: there was optimism in the air in the late summer and several previously postponed customer projects could be started, but decision-making has subsequently slowed down again due to the second wave of the epidemic. Nevertheless, our order backlog for the remainder of the year is still at a good level.
This year, we have invested considerably in the development of competence and new services. Solutions related to cloud services and their information security have been a special focus area in this respect. In cloud services, we rely on a multi-cloud model, which means that we make use of various cloud platforms in our service production with the aim of finding the most secure and effective solution for each customer.
One of Viria’s strengths is our unique combination of security, analytics and digitalisation expertise. Our security and information businesses have together developed video analytics solutions to help our customers use data obtained from surveillance cameras for other uses as well. One example is the crowd counting performed by the City of Helsinki, which helps allocate the resources of the public authorities to locations where crowds are large or ensure that the recommended crowd sizes are not exceeded. Video analytics can also be used to measure the utilisation rate of indoor and outdoor spaces, quality assurance and marketing.
We are in the middle of a transformative period whose impacts will only become clear over the long term. In spite of the uncertainty, it is evident that the information society is making rapid progress along the road to digitalisation and there is a significant need for physical and digital security regardless of economic cycles. Supported by two firm pillars, Viria can look to the future with confidence.

Events after the review period

On 8 October 2020, Viria announced that Mika Vihervuori is resigning after seven years as the company’s CEO, and that Samu Konttinen has been appointed as his successor. Konttinen will take up his post as CEO on 1 January 2021 at the latest, and the current CEO Mika Vihervuori will continue in his present role until then.
On 28 October 2020, the Board of Directors of Viria Plc decided, based on the authorisation of the Annual General Meeting, to distribute a dividend of EUR 0.49 per share from the company’s distributable funds. The dividend will be paid to shareholders who are registered in the company’s shareholders’ register maintained by Euroclear Finland Oy on the dividend payment record date of 30 October 2020. The dividend will be paid on 6 November 2020.
29 October 2020
Viria Plc
Board of Directors
Further information
CEO Mika Vihervuori, tel. +358 40 720 2140
Viria is an information and security technology solution provider that promotes digitalisation without compromising security. Our operations combine strong expertise in business intelligence, digital business and physical and cyber security with a customer-oriented and creative approach.
The Viria Group consists of the parent company Viria Plc and its subsidiaries Viria Security Ltd, Aureolis Oy, Bitfactor Oy, Hibox Systems Oy, Tansec Oy and Spellpoint Ltd. All companies are experiencing good growth and have a strong market position.  Viria’s revenue in 2019 was EUR 103 million. At the moment, the Group has approximately 700 employees.