Digitalist Group Plc’s Business Review, 1 January – 31 March 2020

Digitalist Group Plc                    Stock Exchange Release                 29 May 2020 at 09:00

January–March 2020 (comparable figures for 2019 in parentheses):

·Turnover: EUR 6.5 million (EUR 7.6 million), change of -14.6%.

·EBITDA: EUR -0.7 million (EUR -0.4 million), -10.7% of turnover (-5.1%).

·EBIT: EUR -1.5 million (EUR -1.2 million), -22.8% of turnover (-16.2%).

·Net income: EUR -2.1 million (EUR -1.1 million), -32.9% of turnover (-14.4 %).

·Earnings per share (diluted and undiluted): EUR 0.00 (EUR 0.00).

·Number of employees at the end of the review period: 235 (270), reduction of 13.0%.

CEO Petteri Poutiainen:

Digitalist Group combines brand, design and technology expertise in a unique way. We aim to help our customers to provide their target groups with first-class customer experiences.

In the first quarter of 2020, we continued to work on improving profitability. This will remain a key objective in the second quarter of the financial year.

At the end of March, the company had a total of 235 employees (down 13%) of more than 30 different nationalities in five different countries. This is a good illustration of our company’s diversity, a characteristic which provides our customers with added value. Digitalist Group has studios in locations including Helsinki, Stockholm, London and Vancouver, each focusing on different areas of expertise and employing top-level experts, ranging from strategy and brand designers to design and technology specialists.

Digitalist Group’s largest customers include Honda, Volvo and Tikkurila. Our other significant customers include Fredman, Spotify, the City of Helsinki, the University of Helsinki, Kulturhuset Stadsteatern and the Finnish Population Register Centre.

EVENTS DURING THE FIRST QUARTER

We have decided to continue with our current strategy. Special attention and focus will continue to be required to enable profitable growth and crystallise the company’s key messages to suit the changing world.

Digitalist Group has everything in place to assist customer companies in renewal, seeking feedback using the LeanLab user experience tool, and improving the customer and employee experience – particularly online. I believe that comprehensively improving the customer experience is an increasingly important priority for our customers. The key aspects are the capacity to refine and understand customer data and adapt quickly.

The Group launched an extensive efficiency programme in March, including co-operation negotiations in Finland. The company made rapid preparations for changes to customer orders and deliveries due to the coronavirus (COVID-19) and the consequent financial and production impacts. I believe that the efficiency programme will provide a strong basis for improving profitability.

/ CEO Petteri Poutiainen

FUTURE PROSPECTS

In 2020, turnover is expected to decrease in comparison with 2019, and EBITDA is expected to improve in comparison with 2019.

OTHER EVENTS DURING THE FIRST QUARTER

       

The stock exchange releases for the review period are on the company’s website at /investors/releases.

EVENTS SINCE THE REVIEW PERIOD

On 7 April 2020, The Company completes co-operation negotiations concerning all of the group’s employees. The Company estimates that it will achieve annual savings of an estimated EUR 2.3 million through reorganisation and rationalisation measures concerning the organization.

The company held its Annual General Meeting on 14 April 2020. The minutes of the Annual General Meeting and the decisions made are on the company’s website at /investors/hallinnointi/yhtiökokous.

The Annual General Meeting elected Paul Ehrnrooth, Andreas Rosenlew, Esa Matikainen, Peter Eriksson and Maria Olofsson as ordinary members of the Board of Directors.

At the Board meeting held after the Annual General Meeting, the Board of Directors elected Andreas Rosenlew as the Chair of the Board and Esa Matikainen as the Vice Chair of the Board.

In addition, the meeting decided to dissolve the Board’s committees for the time being. The company’s Board of Directors previously had an Audit Committee and a Remuneration Committee.

On 16 April 2020, Ulrika Mengshoel Wedelin was appointed a member of the company’s management group.

On 30 April 2020, Digitalist Group Plc’s subsidiary, Digitalist Finland Ltd, reached an agreement with Nordea Bank on a change to the repayment schedule for a EUR 2.0 million loan. The new repayment schedule has extended the term of the loan by two years until April 2025, and repayment is due to begin in April 2021.

When the interim report was published, the company expected its working capital to be sufficient to cover its requirements over the next 12 months.

DIGITALIST GROUP PLC

Board of Directors

Additional information:

Digitalist Group Plc

CEO Petteri Poutiainen, tel. +358 40 865 4252,

Interim CFO Mervi Södö, tel. +358 40 136 5959,

Distribution:

Nasdaq Helsinki Ltd

Major media

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