0R6B Asiakastieto Group Plc

ENENTO GROUP PLC, INSIDE INFORMATION 20 JULY 2023 AT 10.00 A.M. EEST

Inside information: Enento Group updates its strategy and long-term financial targets

The Board of Directors of Enento Group Plc (“Enento” and the “Company”) has approved the updated strategy for the period 2023-2026 and confirmed the Company's long-term financial targets. Enento remains fully committed to delivering sustainable, profitable growth and maximizing shareholder value.

The previous strategy, initially published on 8 May 2020 for the period 2020-2023, underwent its latest annual review in September 2022.

Key highlights

• The overall data market in Europe is expected to maintain robust growth and increasingly regulated areas such as KYC and AML are anticipated to grow rapidly.
• Enento is addressing the highly compelling market trends, such as tightening regulation and increased focus on reputational risks, presenting opportunities for Enento to develop new services and enhance current offerings.
• Enento's core operations revolve around credit information services utilizing Enento’s leading positions in Finland and Sweden with relatively stable growth prospects, while new growth opportunities lie in other service and product areas.
• Prioritized growth areas include ESG, compliance, and master data services, with a focus on new services through development and innovation as well as continuously enhancing the existing offerings.
• The updated strategy focuses on execution, consistent growth, and enhanced profitability, with scalable growth and margin expansion as key objectives.
• The strategy emphasizes market penetration in Finland and Sweden, exploring new customer verticals, and strengthening the position both in the small and medium-sized enterprises and large corporations segments, as well as optimizing the buying and selling experience resulting in improved customer experience.
• The road to 5-10% average annual net sales growth consists of underlying macroeconomic market growth, price adjustments, market penetration and the introduction of new services.
• Investing in scalable growth, initiatives to optimize sales processes, distribution channels, and IT efficiency among others are the key areas to improve profitability and achieve the targeted margin level by the end of the strategy period.

"I am delighted to announce our Company's updated strategy and the promising opportunities that lie ahead," states CEO Jeanette Jäger. "Enento's current portfolio includes a wide range of products and services that leverage our data on businesses, consumers, and assets, catering to a diverse customer base. The updated strategy aligns seamlessly with identified market trends and customer demands, placing emphasis on developing selected new offerings and expanding into underdeveloped customer verticals. With a keen focus on automation and digitalization efforts, we are driving enhanced customer experience and streamlining internal operations and processes. With this new strategy, we will focus on achieving scalable, sustainable growth and improved profitability in line with our long-term financial targets."

Updated strategy

Enento’s purpose is to build trust in the everyday. The Company transforms data into knowledge and intelligence, that is shared through its solutions and products, and as they are used in interactions, it builds trust in the everyday between people, businesses, and society. The major industry trends, such as enterprises seeking more and more external data for better decision-making in a tightening regulatory environment and the focus on ESG, and greater demand for transparency and accountability, are shaping the business landscape, compelling enterprises to adapt and embrace innovative approaches to remain competitive and compliant in an ever-changing environment.

Enento's updated strategy is aiming to achieve consistent growth and enhanced profitability. While retaining key elements from the previous strategy, there is now a specific emphasis on scalable growth through prioritized initiatives and margin expansion activities. The strategic objectives of retaining and strengthening a leading position in the credit information business and becoming the leading provider of business information services in the Nordics remain unchanged from the previous strategy period. Furthermore, the Company may pursue potential targeted acquisitions in support of its strategy. 

Credit at the core

Enento's core operations revolve around credit information services, while other services present new growth opportunities across various customer segments. Leveraging strong data processing capabilities, advanced analytics, and commitment to technologies like real-time data and machine learning, the Company possesses a unique position to enhance offerings and drive customer value creation with scalable solutions. Enento’s growth trajectory is expected to be driven by the development of innovative services addressing sustainability, regulatory compliance, and master data management. By staying attuned to evolving customer demands and continuously developing new solutions, the Company is determined to retain and strengthen its position as a leading provider in the credit information services and becoming the leader in business information services.

Throughout the strategy period, fundamental growth is anticipated from credit information services, covering both consumer credit and business credit offerings. Despite the Company’s already strong market position, potential is recognized to further reinforce advantages in the future through development of value-added services in the areas such as PSD2 and fraud prevention. Enento has identified significant opportunities in underdeveloped customer verticals and segments, creating opportunities for expansion and broader market penetration. The Company is also actively following developments in Finnish and Swedish legislation related to credit registers and credit information.

Priority growth areas

Furthermore, the Company has identified three priority growth areas: ESG, compliance, and master data services. While already providing services in these areas, the Company’s offerings are currently limited (e.g., compliance offering outside Finland) or in response to evolving customer needs (e.g., ESG in lending processes). Enento’s objective is to expand its presence in these high-growth service sectors through development and innovation. Master data plays a crucial role as a fundamental enabler for credit and business information businesses, presenting strong identified synergies. By directing investments and activities towards these three growth areas, as well as continuously enhancing the existing offerings synergistic to Enento’s core capabilities and activities, the Company aims to support customers' constant needs for better decision-making.

The primary growth areas in the strategy period include Finland and Sweden, focusing on market penetration and exploring new customer verticals. Furthermore, the Company intends to leverage its scalable business model to capitalize on the opportunity and introduce selected offerings in Norway and Denmark. Enento has also recognized unexploited potential in strengthening its position within the small and medium-sized enterprises and large corporations segments across all markets, aiming to provide an efficient and scalable offering tailored to these customer segments. Additionally, underlying market growth related to industry trends, driven by economic activity and household lending volumes, contributes to organic growth potential within the industry. The Company anticipates that the data market, including data-as-a-service, in Europe will maintain a robust growth rate in the high single digits over the coming years. This favorable trend presents opportunities for Enento to develop new services and enhance its current offerings.

Road to margin expansion

In addition to investing in scalable growth opportunities, the Company expects that other initiatives will contribute to achieving its target of around 40% adjusted EBITDA margin by the end of the strategy period. Focus will be on optimizing and remodeling sales resources and distribution channels, enabling leveraging solutions at a Nordic level while prioritizing customer-centricity. The Company has already taken steps to enhance IT efficiency, including the consolidation of local capabilities and moving into agile portfolio management with efficient resource allocation, and will gradually decommission legacy solutions and platforms. Furthermore, it has identified potential permanent cost efficiencies in areas such as offshoring, vendor consolidation, and infrastructure streamlining. This ongoing work throughout the strategy period is ultimately anticipated to lead to an improvement in profitability.

Long-term financial targets aiming at profitable growth

Enento's long-term financial targets represent its perspective on creating long-term value, guided by strategic choices. Despite the prevailing uncertain macroeconomic environment, the Company remains confident in its ability to achieve consistent and sustainable growth in terms of both net sales and profitability throughout the strategy period. While market growth, price adjustments, and expanded market penetration contribute to growth, it anticipates a significant portion of it stemming from new services. By fostering innovation and making targeted investments in growth areas, Enento aims to accelerate its growth trajectory and increase the proportion of net sales from new services by the end of the strategy period.

The financial targets for the strategy period are the following:                        

• An annual average net sales growth of 5-10% for the period 2024-2026
• Adjusted EBITDA margin around 40% in 2026
• Net debt to adjusted EBITDA ratio below 3x
• Share of new services from net sales around 10% in 2026

Additionally, the Company aims to be carbon neutral by the end of 2023 and have net zero emissions by the end of 2030.

Summary

Enento is confident in its ability to execute its updated strategy and achieve the stated long-term objectives. With a focus on growth through prioritized initiatives and margin expansion activities, it aims to retain a leading position in the credit information business while becoming the leading provider in business information services. Enento plans to develop innovative services that cater to evolving customer needs and drive growth in areas such as ESG, compliance, and master data. With a strong market position, untapped potential in new customer verticals, and a commitment to continuous development, Enento is poised to deliver steady, sustainable growth and improve profitability in the coming years.

The Company’s strategy and its implementation will be discussed in more detail in the Capital Markets Day that is planned to be held during the fall 2023.

ENENTO GROUP PLCBoard of Directors

For further information: Jeanette JägerCEOTel. +46 72 141 00 00

Distribution: Nasdaq Helsinki Major mediaenento.com/investors

Enento Group is a Nordic knowledge company powering society with intelligence since 1905. We collect and transform data into intelligence and knowledge used in interactions between people, businesses, and societies. Our digital services, data and information empower companies and consumers in their daily digital decision processes, as well as financial processes and sales and marketing processes. Approximately 421 people are working for Enento Group in Finland, Norway, Sweden, and Denmark. The Group’s net sales for 2022 was 167.5 MEUR. Enento Group is listed on Nasdaq Helsinki with the trading code ENENTO.

This stock exchange release contains forward-looking statements. All statements other than statements of historical fact included in this release are forward-looking statements. Forward-looking statements give the Company’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as “target,” “believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “estimate,” “plan,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the Company’s actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which it will operate in the future.

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