Fondia: Financial Statements Release 2024 - Net sales decreased and profit weakened, transformation started
Fondia Plc
Company release
2025-02-13 at 8.30 a.m. EET
FINANCIAL DEVELOPMENT IN BRIEF
Figures in parentheses refer to the corresponding period of the previous year, unless otherwise stated. Fondia Plc and its group companies are hereinafter referred to as "Fondia" or the "company".
October-December 2024 summary:
- Net sales EUR 6.5 million (7.2), a change of -9.6%
- EBITDA EUR 0.5 million (1.3)
- EBITDA-% 7.8% (18.4)
- Adjusted EBITDA EUR 0.7 million (1.3)*
- Adjusted EBITDA-% 10.5% (18.4)*
- Operating profit (EBIT) EUR 0.3 million (1.1)
- Operating profit-% (EBIT-%) 3.8% (15.2)
- Adjusted operating profit (EBIT) EUR 0.4 million (1.1)*
- Adjusted operating profit (EBIT-%) 6.5% (15.2)*
- Personnel (period average FTE) 158 (168), a change of -6.0%
*In October-December 2024, non-recurring expenses totalling EUR 171 thousand were recorded. No non-recurring expenses were recorded in the comparison period.
July-December 2024 summary:
- Net sales EUR 11.8 million (12.6), a change of -5.7%
- EBITDA EUR 0.7 million (1.4)
- EBITDA-% 5.8% (11.4)
- Adjusted EBITDA EUR 0.9% million (1.4)*
- Adjusted EBITDA-% 8.0% (11.4)*
- Operating profit (EBIT) EUR 0.2 million (1.0)
- Operating profit-% (EBIT-%) 1.6% (7.9)
- Adjusted operating profit (EBIT) EUR 0.4 million (1.0)*
- Adjusted operating profit (EBIT-%) 3.8% (7.9)*
- Profit for the period EUR 0.1 million (0.7)
- Adjusted profit for the period EUR 0.3 million (0.7)*
- Continuous monthly invoicing accounted for 46% (47) of net sales
- Personnel (period average FTE) 158 (168), a change of -6.0%
* In July-December2024, non-recurring expenses totalling EUR 260 thousand were recorded. No non-recurring expenses were recorded in the comparison period.
January-December 2024 summary:
- Net sales 25.6 million (26.1), a change of -1.8%
- EBITDA was EUR 1.9 million (2.6)
- EBITDA-% was 7.6% (10.1)
- Adjusted EBITDA EUR 2.3 million (2.6)*
- Adjusted EBITDA-% 8.9% (10.1)*
- Operating profit (EBIT) was EUR 1.0 million (1.8)
- Operating profit-% (EBIT-%) was 4.0% (7.0)
- Adjusted operating profit (EBIT) EUR 1.4 million (1.8)*
- Adjusted operating profit (EBIT-%) 5.3% (7.0)*
- Profit for the period was EUR 0.7 million (1.4)
- Adjusted profit for the period EUR 1.0 (1.4)*
- Adjusted profit-% 3.9%*
- Continuous monthly invoicing accounted for 46% (46) of net sales
- Personnel (period average FTE) was 162 (163), a change of -0.6%
- Net earnings per share was EUR 0.16 (0.34)
- The Board of Directors' (hereafter "the Board") dividend proposal is EUR 0.30 per share
*In the financial year 2024, non-recurring expenses totalling EUR 344 thousand were recorded. No non-recurring expenses were recorded in the comparison period. All non-recurring expenses are related to the change of the Managing Director in Sweden and organisational restructuring.
KEY FIGURES
| Fondia Plc Group | 7-12/2024 | 7-12/2023 | Change, % | 1-12/2024 | 1-12/2023 | Change, % |
| Net sales, 1000 euros | 11,841 | 12,554 | -5.7% | 25,628 | 26,094 | -1.8% |
| EBITDA, 1000 euros | 683 | 1,432 | -52.3% | 1,938 | 2,642 | -26.6% |
| % of net sales | 5.8% | 11.4% | 7.6% | 10.1% | ||
| Adjusted EBITDA, 1,000 euros* | 944 | 1,432 | -34.1% | 2,282 | 2,642 | -13.6% |
| % of net sales* | 8.0% | 11.4% | 8.9% | 10.1% | ||
| Operating profit (EBIT), 1 000 euros | 186 | 990 | -81.2% | 1,017 | 1,827 | -44.3% |
| % of net sales | 1.6% | 7.9% | 4.0% | 7.0% | ||
| Adjusted operating profit (EBIT)* | 446 | 990 | -54.9% | 1,361 | 1,827 | -25.5% |
| % of net sales* | 3.8% | 7.9% | 5.3 % | 7.0% | ||
| Profit for the period, 1000 euros | 60 | 748 | -91.9% | 651 | 1,353 | -51.9% |
| % of net sales | 0.5% | 6.0% | 2.5% | 5.2% | ||
| Adjusted profit for the period, 1,000 euros* | 321 | 748 | -57.1% | 995 | 1,353 | -26.4% |
| % of net sales* | 2.7% | 6.0% | 3.9% | 5.2% | ||
| Net gearing % | -75.8% | -83.9% | -75.8% | -83.9% | ||
| Equity ratio % | 40.4% | 52.0% | 40.4% | 52.0% | ||
| Return on equity (ROE) % | 16.5% | 27.1% | 16.5% | 27.1% | ||
| Average number of employees, full time equivalent (FTE) | 158 | 168 | -6.0% | 162 | 163 | -0.6% |
| Balance sheet total, 1000 euros | 7,448 | 9,514 | 7,448 | 9,514 | ||
| Net earnings per share, euros | 0.02 | 0.19 | 0.16 | 0.34 |
*In the financial year 2024, non-recurring expenses totalling EUR 344 thousand were recorded. No non-recurring expenses were recorded in the comparison period.
OUTLOOK FOR 2025
In 2025, Fondia will focus on improving profitability. The market situation remains uncertain, and this will have a weakening impact on the ability to assess the demand for ongoing legal services and the factors affecting it. In addition, the full impact of the company's change negotiations on the group's revenue is still difficult to estimate more precisely.
CEO TIMO LAPPI:
"The financial year 2024 was difficult for us, especially in Sweden. Fondia's net sales for the financial year decreased by 1.8% compared to the comparison period. International net sales decreased by 9.7% compared to the comparison period, with Sweden decreasing by 15.2% and the Baltics increasing by 37.5%. In Finland, net sales increased by 0.5% compared to the comparison period. The Group's operating profit (EBIT) weakened and was 5.3% (7.0) for the period, adjusted for non-recurring items.
Legal services sales were close to our targets for the financial year, but good sales performance was not enough to compensate for the loss of net sales from ongoing invoicing customers. The economic uncertainty was reflected in reduced resource reservations of our Legal Department Service (LDaaS) customers, a decrease in assignment business and, unfortunately, an increase in customer churn. On the other hand, the need for legal advice also increased in ESG and in employment law advice.
Our strategic goal is to increase the share of our Legal Department Service (LDaaS) and other productised ongoing services in all our market areas and also in addition to increase the share of international business in our total net sales. All ongoing services remained at its previous level of 46% (46) of Fondia's net sales. Total invoicing of Legal Department Service (LDaaS) customers and other customers covered by ongoing services represented 73% (76) of net sales. In Sweden, all ongoing services represented 41% (39) of net sales and in the Baltics, all ongoing services represented 34% (28) of net sales. In Finland, all ongoing services represented 46% (48) of net sales. Due to the problems encountered in Sweden, the share of international net sales in the Group's total net sales decreased and was 23% (25).in the financial year.
We are at an excellent level in delivering customer value and customer experience. The results of the customer satisfaction survey and the customer net promoter score (NPS) of 61 (61) showed that our service concept works, which is a good basis to develop our operations.
During the financial year, the employee net promoter score (eNPS) decreased and was 19 (48). The result reflects our need to invest in the employee experience and to clarify our direction, which we worked on with our employees and customers in the strategy work. Our average productivity for the period decreased and was -1.2% compared to the comparison period. Behind the decline in productivity was our growth challenge and the volume of legal customer work especially in Sweden.
At the beginning of the financial year, we launched a harmonised and updated brand identity to mark the 20th anniversary of our company. We also continued the development of the MyFondia platform and in addition piloted a number of AI applications to improve the competitiveness and efficiency of our services. Emma Ridderstad joined our Swedish subsidiary in August as Managing Director and member of the Group Management Team. At the end of the financial year, we launched a Group-wide savings programme, of which the change negotiations in the Finnish organisation were an integral part. Our aim is to improve the profitability of our business and to adjust our resourcing with the market situation.
The financial year was disappointing for us in terms of results and market conditions had a negative impact on growth and results. Our Baltic business grew strongly, but this was not enough to compensate for a weak financial year in our Swedish business. Our Finnish business grew, but not sufficiently compared to our expectations.
We have started required renewal and changes in our operations already during 2024. Our focus this year will be on profitability by putting customers at the heart of everything we do, improving employee satisfaction and completing strategic development projects. We will closely monitor possible changes in the market situation. When necessary, we respond quickly to changes as appropriate, without compromising the quality of our customer service or the good customer and employee experience."
INVESTOR COMMUNICATIONS
Fondia will publish the financial statements release for January-December 2024 on Thursday 13 February 2025 at 08.30 a.m. EET. The financial statements release and a video of the CEO's presentation as well as the presentation material will be available later on the company's website https://investors.fondia.com/fi/en/releases-and-publications/reports-and-presentations.
An investor call will be held on Thursday 13 February 2025 at 10.00 a.m. EET. The investor call will be held in Finnish and can be accessed online by registering on the company's website at the address https://player.videosync.fi/fondia/2024-tulosjulkistus.
Helsinki, 13 February 2025
Fondia Plc
Board of Directors
For further information, please contact:
Timo Lappi, Interim CEO; Chair of the Board of Directors, tel. +358 40 756 7809
Harri Savolainen, CFO, tel. +358 40 502 1919
Certified Adviser Aktia Alexander Corporate Finance Oy, tel. +358 (0)50 5204098
Fondia in brief
Fondia solves the legal needs of companies by combining the best services from internal legal departments and law firms. Fondia operates in Finland, Sweden, Estonia, and Lithuania, and the Group's net sales in 2024 were €25.6 million. Fondia employs around 180 people.
Distribution:
Nasdaq Helsinki Ltd
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