M-Brain Oy financial statements release 1 January - 31 December 2016
Financial performance July - December 2016:
- Revenue increased by 27.3 per cent to EUR 18,926 (14,863) thousand
- EBITDA increased by 32.6 per cent to EUR 1,530 (1,154) thousand
- Operating profit was EUR 582 (506) thousand
- Profit for the period was EUR -542 (-583) thousand
Financial performance January - December 2016:
- Revenue increased by 17.4 per cent to EUR 35,616 (30,341) thousand
- EBITDA remained at the level of previous period and was EUR 2,611 (2,591) thousand
- Operating profit was EUR 869 (1,284) thousand
- Profit for the period was EUR -789 (-395) thousand
- Balance sheet total at 31 December 2016 was EUR 44,032 (35,042) thousand
Key figures
| 2016 | 2015 | Change | 2016 | 2015 | Change | |
| 1000 EUR | 7-12 | 7-12 | % | 1-12 | 1-12 | % |
| Revenue | 18,926 | 14,863 | 27.3 | 35,616 | 30,341 | 17.4 |
| EBITDA | 1,530 | 1,154 | 32.6 | 2,611 | 2,591 | 0.8 |
| EBITDA % of revenue | 8.1 | 7.8 | 7.3 | 8.5 | ||
| Operating profit | 582 | 506 | 14.9 | 869 | 1,284 | -32.3 |
| Operating profit % of revenue | 3.1 | 3.4 | 2.4 | 4.2 | ||
| Profit for the period | -542 | -583 | -789 | -395 | ||
| Total assets | 44,032 | 35,042 | ||||
| Return on equity (ROE), % | -5.5 | -3.4 | ||||
| Equity ratio, % | 40.1 | 34.9 | ||||
| Personnel (FTE) at the end of period | 456 | 393 |
CEO Kim Nyberg's comments regarding the financial statements
"M-Brain is a global information, technology and consulting services company with offices in 13 countries. We help our clients to navigate the turbulent and ever expanding business environment. We offer crucial external business information and advice in its efficient management and utilization. We turn information into actionable insights for daily decision-making and strategic planning. We call it Informed Leadership.
The integration of Norwegian media monitoring and analysis company Opoint Group during the first half of 2016 continued during the second half of the year. The acquisition supports our strategic goal to become market leader in our field in the Nordics and throughout the Baltics and through the acquisition M-Brain operations expanded to Norway and Estonia. The co-operative negotiations regarding the Nordic and the Baltic regions, which were initiated during the first half of the year, were completed.
The development of net sales in Finland was unsatisfactory, mainly due to poor development of the Finnish overall economy as well as the impact of the changing media landscape to the traditional media monitoring services. The co-operative negotiations regarding Finland were finalised in June."
Events after the review period
After the end of the financial year, Opoint AS, a subsidiary of Opoint Holding AS acquired in April 2016 by M-Brain Insight Oy, has received a legal claim. Opoint AS has denied the claim. Majority of the claim for damages is based on the pre-acquisition period. If on the contrary to Opoint AS expectations the claim results in significant costs, the Company will take action to recover the costs from Opoint Holding AS sellers, based on the warranties given by the seller.
Assessment of major operative risks and uncertainties
Technological development in M-Brain's field of business is extremely fast. In accordance with its strategy, the Company has made significant investments in its own product development to improve its competitiveness compared to its competitors.
The core operations of the Group are insured against accidental damages and interruptions.
Accounts receivables is a significant balance sheet item. Credit risk related to accounts receivables is managed by consistent credit policy and efficient credit management. Credit risk is also reduced by the large number of clients and by the fact that the receivables are allocated to a number of different industries.
M-Brain Group prepares goodwill impairment testing annually, in accordance with the timetable of its planning process or more frequently if there are indications that the value of the asset may be impaired. Changes in cash flow forecasts based on strategic plans, or in the discount rate or perpetuity growth rate, can cause a goodwill write-off, which would weaken M-Brain's result.
M-Brain's EUR 15 million bond listed on First North Bond Market Finland market place is due on 17 June 2017. The company has initiated processes with various parties for arranging refinancing and based on management assessment it is very likely that refinancing will be arranged as planned. Without the accomplishment of the refinancing arrangements under negotiation, the Company does not have adequate working capital for the next twelve months and the Company is not able to repay the bond as part of the course of ordinary business operations.
The Group's loan financing involves covenants agreed with the lenders to which the Company is committed. Fulfillment of the covenants with regard to the key figures are reviewed in connection with the preparation of the half year report and annual accounts.
Outlook for the year 2017
The Company expects the good development of the second half of 2016 to continue and estimates its full-year 2017 revenue and EBITDA to increase from the previous year.
The statements in this release, other than those related to historical facts, are forward looking statements. These statements are based on the management's best belief in the light of currently available information. As such statements involve risks and uncertainties, the actual results may differ materially from such statements.
Disclosure policy
This Stock Exchange Release is a summary of relevant information related to M-Brain's 2016 financial statements release which is attached to this release and is also available on the company's website at www.m-brain.com .
Helsinki 21 March 2017
M-BRAIN OY Board of Directors
Further Information:
Kim Nyberg CEO Email: kim.nyberg@m-brain.com Tel: +358 400 430 538
Mari Orttenvuori CFO Email: mari.orttenvuori@m-brain.com Tel. +358 46 8765 233
Certified Adviser Evli Bank Plc / Petteri Nurminen Tel. +358 40 5095 665
(Attachment: M-Brain 1 Jan - 31 Dec 2016 Financial Statements release)
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