Strong profitability improvement and growth
Financial Statements release 1.1.-31.12.2020 (IFRS)
This release is a summary of Nixu Corporation’s January 1 – December 31, 2020 Financial Statements release. The complete report is attached to this release as a pdf-file and also available on the company website at https://www.nixu.com/investors.
Highlights for January–December 2020:
- Revenue: EUR 53,272 (51,168) thousand, change +4%. Organic growth: 0%.
Managed continuous services grew by +23%. - EBITDA: EUR 2,895 (1,047) thousand, percentage of revenue 5% (2%).
- Adjusted EBITDA: EUR 3,687 (1,525) thousand, percentage of revenue 7% (3%).
- EBIT: EUR -702 (-2,628) thousand, share of revenue -1% (-5%).
- EBIT was affected by an impairment of EUR 1,420 (1,627) thousand on goodwill.
- Nixu initiated reorganization of its operations and a cost reduction program across Nixu Corporation to prepare for the impact of pandemic.
- Nixu signed a new credit facility of EUR 4 million for the next two years.
Financial Guidance for 2021
Nixu estimates its revenue to grow organically and its EBITDA to increase from 2020.
Simultaneously investments to growth are increased.
Key Figures
| EUR thousand | 1 July - 31 Dec 2020 | 1 July - 31 Dec 2019 | 1 Jan - 31 Dec 2020 | 1 Jan - 31 Dec 2019 |
| Revenue | 25,617 | 25,483 | 53,272 | 51,168 |
| Profit/loss for the period | -378 | -4,006 | -1,835 | -3,518 |
| Earnings per share (EUR) | -0.05 | -0.54 | -0.25 | -0.48 |
| EBITDA | 2,836 | -929 | 2,895 | 1,047 |
| EBITDA, % of net sales | 11.1 % | -3.6 % | 5.4 % | 2.0 % |
| Adjusted EBITDA1 | 2,776 | -529 | 3,687 | 1,525 |
| Adjusted EBITDA, % of net sales1 | 10.8 % | -2.1 % | 6.9 % | 3.0 % |
| EBIT | 364 | -3,664 | -702 | -2,628 |
| EBIT, % of net sales | 1.4 % | -14.4 % | -1.3 % | -5.1 % |
| Adjusted EBIT1 | 304 | -3,264 | 90 | -2,150 |
| Adjusted EBIT %1 | 1.2 % | -12.8 % | 0.2 % | -4.2 % |
1 Extraordinary, non-recurring events that do not belong to normal business operations are handled as adjustment items. Such extraordinary items are, for example, non-recurring costs related to restructurings and acquisitions and that are included in other operating expenses. The non-recurring costs included in the operating profit of January-December 2020 were EUR 792 thousand (478). The non-recurring costs included in the operating profit of July-December 2020 were EUR -60 thousand (400).
| EUR thousand | 31 Dec 2020 | 31 Dec 2019 |
| Equity ratio, % | 34.4 % | 37.3 % |
| Net interest-bearing debt | 2,244 | 6,988 |
| Net gearing, % | 16.0 % | 45.4 % |
The figures presented in the financial statements release are un-audited.
Petri Kairinen, CEO of Nixu:
“The year 2020 was a very exceptional due to the uncertainty caused by the coronavirus pandemic. At the same time, the pandemic and the ensuing restrictions led to a wave of digitalization, the impact of which will be felt long after the pandemic has subsided. The demand for cybersecurity services is directly linked to the level of digitalization of companies and society. The second wave of the pandemic, which accelerated around the turn of the year, and the delay in vaccinations will extend the uncertainty a little longer than expected, but, in general, we see 2021 as bright in terms of demand for cybersecurity. In fact, the number of new orders in the last quarter of 2020 topped our previous record.
In 2020, Nixu focused on maintaining business continuity by protecting the health of our personnel, ensuring the adequacy of our finances, streamlining sales operations, and renewing our service structure. After the savings measures, we were able to lighten our cost structure, and we were also more successful in our sales efforts in the fall than anticipated. All of this led to significantly improved profitability in the fall. EBITDA in the second half of the year was 11% of revenue, and our revenue grew by 1%. The improved profitability was partly attributable to the reduction in costs, which will be restored to nearly the earlier level once the situation normalizes.
As previously announced, on March 1, 2021, Nixu will move to a new operating model in which all functions are international and client service and competence development activities are company-wide. The new normal created by the coronavirus pandemic, with increasing remote work and remote deliveries, gives us an excellent opportunity to take this crucial step in making Nixu a strong and unified European cybersecurity player. This will allow us to achieve a sufficiently critical mass for the different units, and strengthen our competitiveness in markets outside Finland. The operating model aims to increase client intimacy and focus, strengthen the development of expertise, and improve profitability through more efficient service provision.
Our clients have also build up cybersecurity teams of their own, and many Nixu employees have moved to work with client organizations. Consequently, our personnel turnover was higher than normal towards the end of the year. For this reason, we estimate that growth in the first half of 2021 will be slower and accelerate in the second half of the year due to new recruitment and the new operating model.
Nixu’s vision is to be the go-to partner in cybersecurity services for large enterprises, especially in the area of business digitalization. In line with this goal, Nixu is launching a separate business unit focused on ensuring industrial IoT solution security. We believe that this initiative will generate interesting growth opportunities with large international industrial hardware manufacturers. At the same time, we will support our second vision of being the best place to work for cybersecurity professionals by offering work opportunities with the latest IoT technologies and business models.
The data breach incidents that became public at the end of the year, such as Solarwinds and, in Finland, Vastaamo and the Finnish Parliament, are likely to raise public awareness of cyber risks. We believe that this and the general digitalization trend will bring significant growth opportunities for 2021. I would like to thank all Nixuans, who worked hard to ensure our delivery capacity in the challenging year of 2020. This work now gives us the keys to growth.”
Financial reporting in 2021
The planned date for the Annual General Meeting is Tuesday, March 30, 2021.
Nixu will publish its half-year financial report for January–June 2021 on Thursday, August 12, 2021 in accordance with its disclosure policy. In addition to the half-year financial report and financial statements, Nixu will publish revenue and EBITDA information from the first and third quarters, as well as the CEO’s overview. The Q1/2021 CEO’s overview, revenue and EBITDA information will be published on April 15, 2021, and Q3/2021 will be published on October 14, 2021.
News conference
Nixu will organize a results briefing for analysts, investors and media representatives on February 11, 2021 at 9:30 AM EEST. The event will be available through a live webcast at https://nixu.videosync.fi/2020-q4-results.
Espoo, February 10, 2021
Nixu Corporation
The Board of Directors
Attachment: Financial Statements release 1.1.-31.12.2020 (IFRS)
Further information:
CEO Petri Kairinen, Nixu Corporation
Telephone: +358 40 832 1832, e-mail: petri.kairinen@nixu.com
Distribution:
Nasdaq Helsinki
Main media
www.nixu.com
Nixu in Brief:
Nixu is a cybersecurity services company on a mission to keep the digital society running. Our passion is to help organizations embrace digitalization securely. Partnering with our clients we provide practical solutions for ensuring business continuity, an easy access to digital services and data protection. We aim to provide the best workplace to our team of about 400 cybersecurity professionals with a hands-on attitude. With Nordic roots we serve enterprise clients worldwide. Nixu shares are listed on the Nasdaq Helsinki stock exchange.
www.nixu.com