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2014-04-30

Enfo: Enfo Oyj's interim report 1/2014 (1 January - 31 March 2014)

Key points of the interim report

* Turnover in January-March fell by 1.2% and stood at EUR 37.1 million
(37.5).
* Operating profit (EBIT) increased in January-March by 15.0% and stood at
EUR 3.3 million (2.9).
* Profit before taxes in January-March amounted to EUR 3.0 million (2.8).
* Earnings per share in January-March were EUR 3.24 (2.89).
* The twelve-month return on investment was 16.0% (15.1).
* In January-March, Enfo Group employed an average of 754 people (792). At
the end of March, the Group employed a total of 752 people (788).
* Cash flow from operating activities in January-March totalled EUR 3.2
million (2.6).
* Short-term risks are associated with maintaining competitive prices in the
highly competitive IT services market. In IT Services, delays in start-up
projects in Outsourcing Services may cause the invoicing of continuous
services to be transferred to the next financial period.

Market

There were no significant changes in the market situation during the first
quarter. Of the company's main market areas, Sweden is expected to show
stronger signs of economic growth than Finland. Competition over prices will
continue to be fierce in all of the company's operating areas.

In 2014, the company estimates that IT service market growth is 2-3% in
Finland and Sweden.

Group structure

Enfo Oyj is the parent company of Enfo Group. Enfo's business operations are
divided into two separately reported segments - IT Services, and Financial
Process Services.

Business development

IT Services

There was good demand for Enfo's IT Services during the first quarter. In
Finland, Enfo signed IT service agreements with Pharmadata Oy, a company
owned by the Association of Finnish Pharmacies. The company is responsible
for the data system services of nearly 500 pharmacies. Pharmadata selected
Enfo as its IT partner to deliver critical IT services to Pharmadata and its
customer under a three-year service agreement. In addition, Enfo won a
bidding process for an IT service agreement on the IT infrastructure
management of Kemijoki Oy, a company specialised in hydropower. Enfo will be
responsible for tasks related to Kemijoki Oy's IT infrastructure, such as
server and workstation management and local support. Integrating Industry
Verticals as part of Outsourcing Services succeeded as planned. A good
example is the IT service agreement signed with Mainio Vire Oy, a company
producing social and care services, where basic IT services are supplemented
by a wide variety of communication solutions.

In Sweden, Outsourcing Services have proceeded favourably on the IT market.
Mölnlycke Health Care, the world's leading supplier of disposable operating
room and wound care products, signed a three-year IT service agreement with
Enfo in Sweden. The agreement covers workstation services, monitoring and
management services for networks, servers and central infrastructure
applications, and level 2 Service Desk support. The agreement makes Enfo a
strategically important IT partner for the global operations of Mölnlycke
Health Care because Enfo will deliver IT services to all of the group's 4,000
workstation users all around the world. The agreement signed with Mölnlycke
Health Care is one of the most extensive IT service agreements signed by Enfo
in Sweden.

Price competition on the Swedish IT market continues to be fierce,
particularly in consultancy projects, with companies launching bidding
processes in order to save costs. Due to the efficiency measures carried out
in 2013, the profitability outlook on infrastructure consulting in Enfo's
Consulting Services has become clearly more positive despite the price
competition. Demand for system integrations and SAP consulting has increased
steadily. Business Intelligence products have also been in good demand, with
several new agreements being signed, for example, with Bisnoden, Mercedes
Benz, international English schools and Opus Bilprovning.

Financial Process Services

Outsourcing service operations for Financial Process Services took a long leap
forward as Enfo Zender concluded a business transaction with the energy group
Pohjolan Voima Oy concerning a financial administration service centre.
Through the transaction, Enfo Zender will produce external accounting
services for Pohjolan Voima. According to the agreement, 12 employees from
the financial administration service centre of Pohjolan Voima will be
transferred to Enfo Zender as established employees. In Financial Process
Services, there has been particularly good demand for process consulting,
with many financial administration identification projects being launched
during the reporting period. The demand is expected to increase further.

In e-invoicing services, the adoption of e-invoicing by companies has
accelerated due to the discontinuation of the national direct debiting
system. As a result, the volumes of e-invoices have shown a strong increase.

Turnover

Enfo Group's turnover decreased by 1.2% in January-March and stood at EUR 37.1
million (37.5). The decrease in Group`s turnover shows the end of automatic
meter management (AMM) projects in Financial Process Services in Finland. The
decrease was decelerated by the positive development of outsourcing service
operations in IT Services in Finland and Sweden.

Development of turnover by reporting segment

---------------------------------------------------------
|EUR million 1-3/2014 1-3/2013 1-12/2013 |
|IT Services 27.9 27.7 113.0 |
|Financial Process Services 9.6 10.1 38.9 |
---------------------------------------------------------
The turnover of Enfo's IT Services increased by 0.8% in January-March and
stood at EUR 27.9 million (27.7). The increase in turnover is based on
stronger demand for Outsourcing Services in Finland and Sweden. The growth
was decelerated by the poor increase in demand for infrastructure consulting
in Sweden.

The turnover of Financial Process Services fell in January-March to EUR 9.6
million (10.1), showing a decrease of 5.3%. The decrease in turnover was
affected by the end of automatic meter management (AMM) projects. The
decrease was decelerated by stronger demand for e-invoicing and growth in
volumes.

Profitability

Enfo Group's profitability improved in January-March, with operating profit
totalling EUR 3.3 million, comprising 8.9% of turnover (2.9 and 7.6%). The
increase in profitability reflects the strong progress of Outsourcing
Services in Finland and Sweden. Profitability was also strengthened by the
increased demand for electronic services offered by Financial Process
Services.

The Group's profit before taxes in January-March stood at EUR 3.0 million
(2.8), comprising 8.0% of turnover (7.5%). The Group's net financing costs in
January-March were EUR -0.3 million (0.0). The result in January-March was
EUR 2.4 million (2.1), comprising 6.4% of turnover (5.7%). Earnings per share
in January-March were EUR 3.24 (2.89).

Development of operating profit by reporting segment

---------------------------------------------------------
|EUR million 1-3/2014 1-3/2013 1-12/2013 |
|IT Services 2.1 1.8 7.0 |
|Financial Process Services 1.2 1.1 4.3 |
---------------------------------------------------------
The increase in the operating profit of IT Services was affected by the good
progress of outsourcing operations, particularly in Finland. The increase
also shows the success of efficiency measures carried out in infrastructure
consulting in Sweden.

The operating profit of Financial Process Services improved slightly from the
previous year. The operating profit was affected by the growth in the volumes
of electronic services and expanded customer agreements.

Financing and investments

Enfo's net investments in January-March stood at EUR 1.4 million (0.6).
Investments consisted of data centre hardware purchased through a financial
leasing agreement and development costs arising from Financial Process
Services operations.

The company's equity ratio was 45.4% (44.0) at the end of the review period.
Interest-bearing net liabilities at the end of March amounted to EUR 26.6
million (29.4), and net gearing was 52.5% (58.7).

Personnel

In January-March, Enfo Group employed an average of 754 people (792). At the
end of March, the Group employed a total of 752 people (788).

Enfo's IT Services employed an average of 634 people (689) in January-March,
while Financial Process Services employed an average of 95 people (80). Of
Enfo's personnel, 359 (346) were employed in Finland and 395 (446) in Sweden
during the review period.

On 14 February 2014, Enfo Oyj was yet again selected as one of the best
workplaces in Finland in the survey organised by the Great Place to Work
Institute Finland. This year, Enfo came 15th in the general series. In
Sweden, the results were released on 28 March 2014, and Enfo was 3rd in the
series of major corporations in the Great Place to Work list.

Board of Directors and management

Enfo Oyj's Chairman of the Board of Directors is Tapio Hakakari, Managing
Director of Webstor Oy. The other members of the Board of Directors are Hannu
Isotalo, Chairman of the Board of Directors of Lujatalo Oy; Ossi Saksman
(until 19 March 2014), Chairman of the Board of Directors of Osuuskunta KPY;
Mammu Kaario, Investment Director at Korona Invest Oy; Timo Kärkkäinen,
Senior Portfolio Manager of Capital Investments at Ilmarinen Mutual Pension
Insurance Company; and Soili Mäkinen, CIO at Cargotec Corporation. Lauri
Kerman, CEO of Osuuskunta KPY, started as a new member of the Board of
Directors on 19 March 2014.

Annual General Meeting 2014

Enfo Oyj's Annual General Meeting, which was held on 19 March 2014, decided,
in accordance with the Board of Directors' proposal, that a dividend of EUR
5.40 per each issued share be paid on the basis of the confirmed balance
sheet for the financial period ending on 31 December 2013, i.e., a total of
EUR 3,185,038.80. The dividend will be paid to shareholders who are recorded
in the company's list of shareholders maintained by Euroclear Finland Oy on
the record date for the dividend payment, 24 March 2014. The dividend will be
paid on 30 May 2014.

According to the proposal of the Nomination Committee, the current members of
the Board of Directors - Tapio Hakakari, Hannu Isotalo, Mammu Kaario, Timo
Kärkkäinen and Soili Mäkinen - were elected as members of Enfo Oyj's Board of
Directors. According to the proposal of the Nomination Committee, Lauri
Kerman was elected as a new member of Enfo Oyj's Board of Directors.
Currently, Lauri Kerman is the CEO of Osuuskunta KPY, Enfo Oyj's parent
...

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