Digia : EFFECTS OF THE DEMERGER ON DIGIA'S CONTINUING OPERATIONS

At its meeting on 3 March 2016, Digia Plc's Board of Directors confirmed that the profit guidance for its continuing operations in 2016 will not change due to the demerger. Digia's continuing operations comprise the Group's domestic segment. On 16 December 2015, the Board of Directors of Digia Plc approved a demerger plan concerning the partial demerger of Digia. According to the demerger plan, Digia will be demerged such that all of Digia's Qt segment-related assets, debt and liabilities will be transferred to the company created in the demerger. The planned name of the new company is Qt Group Plc. Digia's domestic segment will remain with Digia. Digia's Board of Directors proposes that the demerger and the demerger plan be approved at the Annual General Meeting, which is scheduled for 16 March 2016. It is expected that the implementation of the partial demerger will be registered on 1 May 2016. Strategy work on Digia's continuing operations is ongoing Digia seeks organic growth outpacing the average growth rate of the Finnish ICT market, a good level of operating profit and strong cash flow. We aim to distribute 30 per cent of the annual profit in dividends. We are also actively assessing opportunities for carefully selected acquisitions that support the company's strategy. Strategy work on Digia's continuing operations is ongoing and the company will announce its strategy update and financial objectives in the near future. Near-term outlook for Digia's continuing operations Besides pursuing organic growth, Digia will actively seek potential acquisitions to support its strategy and to accelerate domestic business growth. Digia believes digitalisation, the growing popularity of multi-channel services and the revolution in business models involve major business opportunities. To fully tap into these opportunities, Digia will make determined investments in personnel development and recruitment, and in bolstering its offering. Digia expects overall demand to remain moderate in the domestic business and anticipates continued net sales growth in 2016. The outlook is considered particularly positive in the first half. Profit performance in domestic operations in 2016 is anticipated to remain on more or less the same level as last year. Key financial figures for continuing operations (excluding carve-out figures) 1 Jan. - 31 Dec. 2015 1 Jan. - 31 Dec. 2014 (unaudited)(EUR 1,000) (unaudited)(EUR 1,000) ----------------------------------------------------- Net sales 80,946 77,028 Operating result 5,854 6,311 Profit before taxes 5,341 5,880 Net profit 4,246 4,902 Balance sheet total 60,425 57,560 Interest-bearing liabilities 12,148 14,578 Gearing, % 28.2% 42.6% Equity ratio, % 53.4% 50.7% Personnel, 31 Dec. 749 746 Average personnel 740 744 FORMULAS FOR THE INDICATORS Equity ratio = (Shareholders' equity + minority interest) x 100 (%) ------------------------------------------------------------- ------------------------------------------------------------- Balance sheet total - advances received Gearing (%) = (Interest-bearing liabilities - cash and cash equivalents) x 100 ------------------------------------------------------------- ------------------------------------------------------------- Shareholders' equity Helsinki, 4 March 2016 Digia Plc Board of Directors Additional information: President and CEO Juha Varelius, tel. [phone] Distribution: NASDAQ OMX Helsinki Principal media