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