CEO's Review

A Year of Strong Growth

Despite the global economic uncertainty, 2015 marked a period of strong growth for Digia. Our objective was to achieve profitable growth in the selected product and service areas in Finland, and, in the Qt business, worldwide. The company's solid net sales and profit performance translated into positive share price development: Digia's share price rose almost by 150 per cent in 2015.

In the domestic business, we continued our efforts to build deeper customer understanding and better sales. We enjoyed a healthy demand in many sectors, particularly in integration and analytics services. Similarly, the demand for financial sector services continued to grow.

The Qt business recorded the highest growth: 32 per cent from the previous year, 25.5 per cent, excluding the impact of exchange rate fluctuations. Net sales growth prompted an improvement in operating profit, moving our business into the black. Measures taken to expand and optimise the sales and distribution network also contributed to sales growth.

A bright future ahead

The outlook for both of Digia's business segments is very promising. One of the major assets in domestic business is our profound knowledge and understanding of the core processes of local organisations, and of the supporting operational systems and integrations. As a digital business service provider, we can win a bigger role in our customers' value chains.

The positive growth outlook for embedded systems is creating excellent business opportunities for our international Qt business: the Internet of Things (IoT) brings intelligence to all devices people use on a daily basis, creating demand for easy-to-use graphic user interfaces, while the wide range of devices provides significant potential for platform-independent application development tools. These key technology trends together with the changes we have introduced to open source code licensing will drive our Qt licence sales in the automotive industry, household appliances and electronics, and various industrial applications.

We will also expand our Qt sales network by setting up our own business units in the largest market areas, namely the United States, Germany, China, South Korea and Japan, and by growing our distributor network with technology partners.

In domestic business we will continue to pursue significant organic growth, with our business growing faster than the Finnish ICT market on average, a healthy profit level and strong cash flow. We will actively explore opportunities to make carefully selected business acquisitions that support the company strategy.

We want to be the preferred partner for our customers. Our customer promise is the compass we use to steer towards this goal: ability with passion, working together with our customers and partners. The solutions and services we deliver work as promised.

A spin-off to split Digia into two public companies on the drawing board

In August 2015, we began to explore the possibilities of spinning off Digia's business to form two distinct listed companies.

The objective of the demerger is to enable the development of the Qt and Domestic operations as two listed companies focusing on distinct sectors. The demerger will also simplify the business structures, administration and financing arrangements.

The preparations for the demerger have proceeded as planned, and we intend to make a decision regarding the demerger in the Annual General Meeting to be held in March 2016. Approval by Digia's shareholders of the demerger and the demerger plan will make them shareholders of both Digia and Qt. As compensation, Digia's shareholders will be issued one Qt share for each Digia share they own.

If the demerger will be carried out, I will assume responsibility for the Qt business, and Timo Levoranta will take up the CEO position in a new Digia, which will focus on domestic business. I wish Timo a very warm welcome to Digia.

I am very proud of what Digia is today. I would like to thank our customers and shareholders for their continued trust in Digia. But most of all, special thanks to Digia's skilled and motivated personnel. We owe our success to your input and dedication.

With wholehearted thanks to you all for your cooperation,

Juha Varelius
President and CEO