FINANCIAL STATEMENT 2020 1 (35) Innofactor Plc Financial Statement February 18, 2021, at 9:00 Finnish time Innofactor Plc Financial Statement 2020 (IFRS) Despite COVID-19 and an individual project write-down made in 2019, Innofactor achieved the highest net sales, EBITDA, and order backlog of its history in 2020 January–December 2020 in brief: • The net sales were approximately EUR 66.2 million (2019: 64.2), which shows an increase of 3.1% • The operating margin was approximately EUR 7.2 million (2019: 5.1), which shows an increase of 40.8% o In the last quarter of the year, the operating margin was subject to a final write- down and cost item of approximately EUR 1.0 million in total of a project conducted in Sweden in 2019, without which the operating margin would have been approximately EUR 8.1 million • The operating profit was EUR 2.5 million (2019: 0.8), which shows an increase of 214.4% o The operating profit was subject to a corresponding adjustment as the operating margin, without which the operating profit would have been approximately EUR 3.5 million October–December 2020 in brief: • The net sales were approximately EUR 18.3 million (2019: 17.4), which shows an increase of 4.7% • The operating margin was approximately EUR 1.6 million (2019: 1.6), which shows an increase of 1.7% o In the last quarter of the year, the operating margin was subject to a final write- down and cost item of approximately EUR 1.0 million in total of a project conducted in Sweden in 2019, without which the operating margin would have been approximately EUR 2.6 million • The operating profit was EUR 0.4 million (2019: 0.5), which shows a decrease of 16.0% o The operating profit was subject to a corresponding adjustment as the operating margin, without which the operating profit would have been approximately EUR 1.4 million • The order backlog at the end of the review period was EUR 60.4 million (2019: 49.8), which shows an increase of 21.4% Innofactor Oyj Keilaranta 9 [email protected] tel. +358 10 272 9000 FI-02150 Espoo http://www.innofactor.com fax: +358 10 272 9001 FINANCIAL STATEMENT 2020 2 (35) o Innofactor did not receive any orders exceeding the limit for requiring a stock exchange release in the fourth quarter as some decisions were delayed until the turn of the year; these are reported in the section "Events after the review period" o The order backlog increased due to orders received during the third quarter, which were recognized in the order backlog during the fourth quarter; more details under “Innofactor's order backlog increased further to a new record-high level, although there were no significant large orders during the fourth quarter of 2020” Innofactor Oyj Keilaranta 9 [email protected] tel. +358 10 272 9000 FI-02150 Espoo http://www.innofactor.com fax: +358 10 272 9001 FINANCIAL STATEMENT 2020 3 (35) Key figures of the group, IFRS Oct 1–Dec. Oct 1–Dec Jan 1–Dec Jan 1–Dec . 31, 2020 31, 2019 Change 31, 2020 31, 2019 Change Net sales, EUR thousand 18,252 17,432 4.7% 66,164 64,198 3.1% Growth of net sales 4.7% 9.7% 3.1% 1.7% Operating result before depreciation and amortization (EBITDA), EUR thousand* 1,585 1,559 1.7% 7,164 5,089 40.8% percentage of net sales* 8.7% 8.9% 10.8% 7.9% Operating profit/loss (EBIT), EUR thousand* 404 480 -16.0% 2,501 795 214.4% percentage of net sales* 2.2% 2.8% 3.8% 1.2% Earnings before taxes, EUR thousand* 951 271 251.1% 2,050 12 17,234.5% percentage of net sales* 5.2% 1.6% 3.1% 0.0% Earnings, EUR thousand* 257 371 -30.8% 1,761 417 322.7% percentage of net sales* 1.4% 2.1% 2.7% 0.6% Order backlog 60,402 49,753 21.4% 60,402 49,753 21.4% Net gearing* 65.6% 71.8% 65.6% 71.8% Net gearing without IFRS 16 48.8% 49.9% 48.8% 49.9% Equity ratio 42.2% 40.2% 42.2% 40.2% Equity ratio without IFRS 16 41.4% 44.0% 41.4% 44.0% Active personnel on average during the review period**** 543 538 0.9% 544 534 1.9% Active personnel at the end of the review period**** 541 538 0.6% 541 538 0.6% Earnings per share (EUR) 0.0069 0.0099 -30.8% 0.0471 0.0113 316.1% *) The handling of lease liabilities in accordance with IFRS 16 had a positive effect of EUR 493 thousand (2020: 411) on the operating margin (EBITDA) in October 1–December 31, 2020, and an effect of EUR 1,994 thousand (2019: 1,676) on the operating margin (EBITDA) in January 1–December 31, 2020. **) In accordance with IFRS 3, the operating result in October 1–December 31, 2020, includes EUR 473 thousand (2019: 507) and in January 1–December 31, 2020, EUR 1,894 thousand (2019: 2,030) in amortization related to acquisitions, consisting of allocations of the purchase price to intangible assets. ***) Exchange rate changes related to the Group's internal debts (due to the changes of exchange rate of the Swedish krona and Norwegian krone in relation to euro) results in an exchange rate gain of EUR 211 thousand in accordance with IFRS in January 1– December 31, 2020, but this loss does not affect the cash flow, only the result for the financial period, the Group's balance sheet and the equity ratio. In October 1–December 31, 2020, an exchange rate gain of EUR 685 thousand occurred. ****) The Innofactor Group monitors the number of active personnel. The number of active personnel does not include employees who are on a leave of over 3 months. Innofactor’s future outlook for 2021 Innofactor’s net sales and operating margin (EBITDA) in 2021 are estimated to increase from 2020, during which the net sales were EUR 66.2 million and operating margin was EUR 7.2 million. Innofactor Oyj Keilaranta 9 [email protected] tel. +358 10 272 9000 FI-02150 Espoo http://www.innofactor.com fax: +358 10 272 9001 FINANCIAL STATEMENT 2020 4 (35) CEO Sami Ensio's review: After the year of COVID-19, we are expecting stronger organic growth in 2021 The net sales in 2020 were a record-high EUR 66.2 million, which shows an increase of 3.1 percent compared to the previous year. The operating margin (EBITDA) improved by EUR 2.1 million from the previous year and was also a record-high figure, EUR 7.2 million (10.8 percent of the net sales). In the last quarter of the year, the operating margin was subject to a final write-down and cost item of approximately EUR 1.0 million in total of a project conducted in Sweden in 2019, without which the operating margin would have been approximately EUR 8.1 million (12.3 percent of the net sales). The net sales in the fourth quarter of 2020 were EUR 18.3 million, which shows an increase of 4.7 percent compared to the previous year. The net sales increased in Finland but continued to decrease in the other countries compared to the previous year, even though business in other countries did pick up towards the end of 2020. The net sales per employee grew 1.2% from the previous year. The operating margin (EBITDA) remained roughly on a par with the previous year, amounting to EUR 1.6 million (8.7 percent of the net sales). Without the adjustment described above, the operating margin would have been approximately EUR 2.6 million (14.0 percent of the net sales). The order backlog grew to a new historic high, EUR 60.4 million, at the end of the quarter (2019: 49.8), which shows an increase of 21% compared to the same time in the previous year. In 2020, we deepened our co-operation with customers further. We received a record-high number of new orders during the year, which strengthened the order backlog, such as a financial management system for a Finnish trading company, Health Village-related ICT specialist services for the Helsinki and Uusimaa Hospital District (HUS), follow-up development phase of the enterprise resource planning and documentation management system (HAIPA) of administrative and special courts for the Legal Register Centre, ICT consulting services for the Norwegian municipality of Ullensaker, administrative case management solution for the Social Insurance Institution of Finland, bankruptcy and reorganization proceedings system (KOSTI) for the Legal Register Centre, application management system services for Microsoft Office 365 and Microsoft SharePoint environments for VTT Technical Research Centre of Finland, digitization of the quotation process for a large Finnish globally operating manufacturing company, follow-up development of membership management solution for a Swedish trade union, primary IT specialist service framework agreement on the maintenance and development of information systems for the Finnish Transport and Communications Agency Traficom, consulting and maintenance services for Senate Properties, case management system for Tampereen korkeakoulusäätiö, and several other significant projects in Finland, Sweden, Denmark, and Norway. In addition to the above, on January 21, 2021, we announced that the Tax Administration had selected Innofactor in a public procurement competition as the primary provider of IT specialist services in the area of Azure programming, with a total value of EUR 15–25 million, Innofactor Oyj Keilaranta 9 [email protected] tel.