2020

This publication includes the Board of Directors’ Report including a report on non-financial

information, the Financial Statements including Notes to the Financial Statements,

the Auditor’s Report and the Corporate Governance Statement.

Board of Directors’

Report and Financial

Statements

Content

Board of Directors’ Report 2020

BOARD OF DIRECTORS’ REPORT 2020 ………………………………………………………………………………………………… 4

Financial Statements

FINANCIAL STATEMENTS …………………………………………………………………………………………………………………………… 25

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME …………………………………………………… 25

CONSOLIDATED STATEMENT OF FINANCIAL POSITION ……………………………………………………………… 27

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ………………………………………………………………… 28

CONSOLIDATED STATEMENT OF CASH FLOWS ……………………………………………………………………………… 30

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ……………………………………………………………31

1 General information ………………………………………………………………………………………………………………………………31

2 Summary of significant accounting policies ……………………………………………………………………………… 31

2.1 Basis of preparation ………………………………………………………………………………………………………………………31

2.1.1 New Standards and Interpretations Adopted in 2020 ……………………………………… 32

2.1.2 New standards and interpretations not yet adopted ……………………………………… 32

2.2 Consolidation ……………………………………………………………………………………………………………………………… 32

2.3 Segment reporting …………………………………………………………………………………………………………………… 32

2.4 Goodwill and intangible assets …………………………………………………………………………………………… 32

2.5 Property, plant and equipment …………………………………………………………………………………………… 34

2.6 Financial assets …………………………………………………………………………………………………………………………… 34

2.7 Accounts receivable ………………………………………………………………………………………………………………… 35

2.8 Cash and cash equivalents …………………………………………………………………………………………………… 35

2.9 Financial liabilities ……………………………………………………………………………………………………………………… 35

2.10 Accounts payable …………………………………………………………………………………………………………………… 36

2.11 Foreign currency translation and net investment hedge ………………………………………… 36

2.12 Interest income …………………………………………………………………………………………………………………………… 36

2.13 Share capital ……………………………………………………………………………………………………………………………… 36

2.14 Current and deferred income tax ……………………………………………………………………………………… 36

2.15 Employee benefits …………………………………………………………………………………………………………………… 37

2.16 Provisions ……………………………………………………………………………………………………………………………………… 38

2.17 Share-based payments ………………………………………………………………………………………………………… 38

2.18 Revenue recognition ………………………………………………………………………………………………………………… 39

2.19 Lease agreements ………………………………………………………………………………………………………………………41

2.20 Government grants ………………………………………………………………………………………………………………… 43

2.21 Operating profit (EBIT) …………………………………………………………………………………………………………… 43

3 Critical accounting estimates and judgements …………………………………………………………………… 43

3.1 Defining cash-generating units, allocating goodwill and assumptions

used in goodwill impairment testing ………………………………………………………………………………………… 44

3.2 Business combinations ……………………………………………………………………………………………………………… 44

3.3 Accounting for the shareholder agreement …………………………………………………………………… 44

3.4 Capitalised development expenses…………………………………………………………………………………… 44

3.5 Recoverability of deferred tax assets ………………………………………………………………………………… 44

3.6 Defined benefit pension obligations ………………………………………………………………………………… 45

4 Financial risk management …………………………………………………………………………………………………………… 45

4.1 Financial risk factors …………………………………………………………………………………………………………………… 45

4.1.1 Market risk ……………………………………………………………………………………………………………………………… 45

4.1.2 Credit risk ……………………………………………………………………………………………………………………………… 46

4.1.3 Liquidity risk ………………………………………………………………………………………………………………………… 48

4.2 Capital management ……………………………………………………………………………………………………………… 48

5 Acquisitions …………………………………………………………………………………………………………………………………………… 49

6 Net sales ………………………………………………………………………………………………………………………………………………… 50

7 Other operating income …………………………………………………………………………………………………………………… 50

8 Materials and services ……………………………………………………………………………………………………………………… 50

9 Personnel expenses …………………………………………………………………………………………………………………………… 50

10 Other operating expenses ………………………………………………………………………………………………………………51

11 Depreciation and amortisation ……………………………………………………………………………………………………… 51

12 Finance income and expenses …………………………………………………………………………………………………… 52

13 Income tax expenses ……………………………………………………………………………………………………………………… 52

14 Earnings per share …………………………………………………………………………………………………………………………… 53

15 Intangible assets ……………………………………………………………………………………………………………………………… 54

16 Property, plant and equipment ………………………………………………………………………………………………… 56

17 Financial instruments ……………………………………………………………………………………………………………………… 57

18 Accounts receivable and other receivables ………………………………………………………………………… 58

19 Assets and liabilities based on contracts with customers ……………………………………………… 58

20 Cash and cash equivalents ………………………………………………………………………………………………………… 59

21 Equity ……………………………………………………………………………………………………………………………………………………… 59

22 Post-employment obligations …………………………………………………………………………………………………… 60

23 Financial liabilities …………………………………………………………………………………………………………………………… 62

24 Deferred tax assets and liabilities …………………………………………………………………………………………… 62

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25 Other current liabilities …………………………………………………………………………………………………………………… 64

26 Contingent liabilities ……………………………………………………………………………………………………………………… 64

27 Related parties ………………………………………………………………………………………………………………………………… 64

28 Group companies …………………………………………………………………………………………………………………………… 68

29 Events after the reporting date ………………………………………………………………………………………………… 69

PARENT COMPANY INCOME STATEMENT (FAS) ………………………………………………………………………………… 70

PARENT COMPANY BALANCE SHEET (FAS) …………………………………………………………………………………………… 71

PARENT COMPANY STATEMENT OF CASH FLOWS (FAS) ……………………………………………………………… 73

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS …………………………………………………… 74

1 Accounting principles ………………………………………………………………………………………………………………………… 74

1.1 Valuation principles …………………………………………………………………………………………………………………… 74

1.2 Items denominated in foreign currencies ………………………………………………………………………… 74

1.3 Cash pooling arrangement …………………………………………………………………………………………………… 74

2 Net sales ………………………………………………………………………………………………………………………………………………… 74

3 Personnel expenses …………………………………………………………………………………………………………………………… 74

4 Other operating expenses …………………………………………………………………………………………………………… 75

5 Finance income and expenses …………………………………………………………………………………………………… 75

6 Appropriations …………………………………………………………………………………………………………………………………… 75

7 Income tax expenses ………………………………………………………………………………………………………………………… 76

8 Investments …………………………………………………………………………………………………………………………………………… 76

9 Long-term receivables …………………………………………………………………………………………………………………… 76

10 Short-term receivables ………………………………………………………………………………………………………………… 76

11 Equity ……………………………………………………………………………………………………………………………………………………… 77

12 Current liabilities ………………………………………………………………………………………………………………………………… 77

BOARD’S PROPOSAL FOR THE DISTRIBUTION OF FUNDS …………………………………………………………… 78

SIGNATURES TO THE FINANCIAL STATEMENTS ………………………………………………………………………………… 79

AUDITOR’S NOTE…………………………………………………………………………………………………………………………………………… 79

AUDITOR’S REPORT ……………………………………………………………………………………………………………………………………… 80

Governance

CORPORATE GOVERNANCE STATEMENT 2020 ……………………………………………………………………………… 85

BOARD OF DIRECTORS ……………………………………………………………………………………………………………………………… 96

EXECUTIVE MANAGEMENT TEAM …………………………………………………………………………………………………………… 98

Shares and Shareholders

SHARES AND SHAREHOLDERS………………………………………………………………………………………………………………… 101

INFORMATION FOR SHAREHOLDERS ……………………………………………………………………………………………………104

ENENTO AS AN INVESTMENT ……………………………………………………………………………………………………………………105

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Board of Directors’ report 2020

Business Overview

Enento Group Plc (“the Company”) is a Finnish public limited liability company and

the parent company to Enento Group (“Enento Group” or “the Group”). On the

financial statements date, the Group consisted of the parent company Enento

Group Plc, Suomen Asiakastieto Oy, Emaileri Oy, Proff AS, Proff ApS and UC AB and

its subsidiaries UC Affärsinformation AB and Proff AB.

The Annual General Meeting of 12 June 2020 resolved to amend the Compa-

ny’s Articles of Association regarding the trade name. The Annual General Meet-

ing resolved to amend the trade name of the company to be Enento Group Plc.

Enento Group did not make any acquisitions during the financial year 1 Jan-

uary–31 December 2020. Enento Group acquired the shares of the business in-

formation service Proff in Norway, Sweden and Denmark under an agreement

signed on 20 May 2019. The transaction was completed on 1 July 2019. The Proff

companies’ balance sheets and income statements have been included in

Enento Group Plc’s consolidated balance sheet and income statement starting

from 1 July 2019.

Enento Group is one of the leading Nordic providers of business and con-

sumer information services. The Group operates in the business and consum-

er information services, collateral valuation, real estate information, sales and

marketing information as well as consumer credit information markets in Finland,

Sweden, Norway and Denmark. The Group’s products and services are primarily

used for risk management, finance and administration, decision-making, sales

and marketing, automation, compliance, real estate transactions and real es-

tate financing as well as personal financial management. The Group’s largest

clients include financial institutions and other financial service providers, ex-

pert service companies, insurance companies as well as wholesale and retail

companies. The Group’s customer base includes corporations as well as private

individuals.

Enento Group has comprehensive databases consisting of information gath-

ered from the authorities and other public sources as well as privately acquired

information. The databases are the basis for the Group’s product and service

offering and the development of new products and services. The Group has a

strong track record of developing and launching new products and services.

Enento Group has an extensive product and service offering that is based on

the Group’s own databases, data links to public sources, data provided by the

Group’s clients and other companies as well as data gathered from the Internet.

The Group’s product and service offering ranges from simple information concern-

ing corporations and private individuals to advanced risk management services,

analyses as well as sales and marketing services. The Group delivers its products

and services to clients; for example, by integrating its services into the client’s

business processes, through a contractual client’s user interfaces and open online

services that do not require separate subscription agreements. The Group also

offers printed products and credit rating certificates.

Enento Group’s organisation consists of two types of units: business areas and

functional units. The business areas are responsible for the Group’s service offering

and the functional units for the production, maintenance and active development of

the operations in their own focus area and business processes. The functional units

are Sales Units, Marketing and Communications, IT and Technology, HR, and Finance.

The Group’s business areas are:

Risk Decisions: Companies engaging in corporate and consumer business use de-

cision services and solutions for general risk management, credit risk management,

financial management, customer acquisition, decision-making, fraud and credit

loss prevention as well as for gaining knowledge of and identifying their customers.

Customer Data Management: Customer management services help sales and

marketing professionals to improve the efficiency of their work and to boost cus-

tomer management by providing target group tools, services for surveying po-

tential customers, register updates and maintenance, as well as various target

group extractions.

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Digital Processes: Services in this business area include, among others, real estate

and apartment information, information about buildings and their valuation as

well as solutions that help customers to automate their collateral management

processes and digitalise the administration of housing purchases. The services of

the business area are also used for compliance purposes; for instance, to identify

companies’ beneficial owners and politically exposed persons.

SME and Consumers: Digital services for small and micro companies with easy-to-

use applications and user interfaces for the evaluation of risks and sales potential,

acquisition of other relevant information on customers and business partners and

proof of own creditworthiness. Services for consumers help consumers to under-

stand and better manage their finances, while simultaneously protecting them

from identity theft and fraud.

Financial Results

Net Sales

Enento Group’s net sales in the financial year 2020 amounted to EUR 151,3 million

(EUR 146,0 million) and increased by 3,7 % compared with corresponding period of

the previous year. Net sales from new products and services were EUR 8,5 million

(EUR 5,9 million), which was 5,6 % (4,0 %) of the total net sales for the financial year.

Net sales growth was mainly attributable to the strong development of the SME

and Consumers business area, driven by the Proff acquisition and online consumer

services in Sweden, and the rapid growth of the Digital Processes business area

in both markets. The negative development of the demand for consumer-related

risk management services in the Risk Decisions business area due to effects re-

lated to the COVID-19 pandemic in both Finland and Sweden had a substantial

negative impact on the development of net sales for the Group as a whole.

Financial Results

Enento Group’s operating profit (EBIT) for the financial year 2020 amounted to EUR

27,8 million (EUR 27,8 million). Operating profit included items affecting compara-

bility of EUR 4,9 million (EUR 3,3 million), mainly arising from an arbitration institute

decision regarding an additional payment related to the Proff acquisition, costs

associated with the arbitration process and other M&A related expenses as well

as amortisation from fair value adjustments related to acquisitions of EUR 12,3

million (EUR 11,6 million).

The adjusted EBIT margin for the financial year 2020 increased year-on-year.

The development of profitability during the financial year was significantly sup-

ported by cost synergies as well as the implementation of the fixed cost adjust-

ment programme planned for the financial year and announced by the Group in

March. The growth of profitability was tempered by the acquired Proff business

having a diluting effect on the EBIT margin, the marketing investments made in

growing the sales of continuous subscription services and the Group’s brand re-

newal. The development of adjusted EBIT margin was also affected by invest-

ments in IT systems and growth of depreciation and amortisation related to cap-

italised product development costs.

The Group’s depreciation and amortisation for the financial year 2020 amount-

ed to EUR 21,3 million (EUR 20,5 million). Of the depreciation and amortisation, EUR

12,3 million (EUR 11,6 million) resulted from amortisation from fair value adjustments

related to the acquisitions.

Net financial expenses for the financial year 2020 were EUR 2,7 million

(EUR 2,9 million).

The tax amount booked by the Group as expense for the financial year 2020

was EUR -5,6 million (EUR -5,2 million)

The Group’s profit for the financial year 2020 was EUR 19,4 million (EUR 19,7

million).

Cash Flow

Cash flow from operating activities in the financial year 2020 amounted to EUR

40,9 million (EUR 41,9 million). The effect of the change in the Group’s working cap-

ital on cash flow was EUR 0,4 million (EUR 1,6 million). The impact of items affect-

ing comparability on operating cash flow was EUR -4,4 million (EUR -2,7 million).

Withholding taxes related to the cash components of rewards paid under the

long-term incentive plan for the management had an impact on operating cash

flow of EUR -0,5 million (EUR -1,1 million) during the review period.

The Group paid EUR 5,7 million (EUR 4,9 million) in taxes in the financial year

2020.

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Cash flow from investing activities for the review period amounted to EUR -10,3

million (EUR -19,4 million). The cash flow from investing activities consisted of ac-

quisitions of intangible assets and property, plant and equipment.

Cash flow from financing activities for the financial year 2020 amounted to

EUR -24,9 million (EUR -35,0 million). The cash flow from financing activities for the

review period consisted of capital repayment and repayments of lease liabilities

(IFRS 16).

Statement of financial position

On 31 December 2020, the Group’s total assets were EUR 552,5 million (EUR 543,3

million), total equity amounted to EUR 315,1 million (EUR 310,7 million) and total lia-

bilities to EUR 237,5 million (232,6 million). Of the total liabilities, EUR 167,0 million (EUR

166,2 million) were non-current interest-bearing liabilities, EUR 23,2 million (EUR 24,1)

deferred tax liabilities, EUR 8,5 million (EUR 7,9) non-current pension liabilities, EUR

2,2 million (EUR 2,3 million) current interest-bearing lease liabilities and EUR 36,6

million (EUR 32,1 million) current, non-interest-bearing liabilities. Goodwill amount-

ed to EUR 358,2 million (EUR 351,4 million) at the end of the financial year.

Enento Group’s cash and cash equivalents at the end of the financial year

2020 were EUR 26,2 million (EUR 20,4 million), and net debt was EUR 143,0 million

(EUR 148,1 million).

Capital expenditure

The majority of Enento Group’s capital expenditure is related to the development

of products and services as well as investments in IT infrastructure. Other capital

expenditure mainly comprises purchases of company cars and office equipment.

The Group’s capital expenditure in 2020 totalled EUR 12,0 million (EUR 12,4 mil

lion). Capital expenditure on intangible assets in 2020 was EUR 11,1 million (EUR

11,6 million) and capital expenditure on tangible assets was EUR 0,9 million (EUR

0,8 million).

Research and Development

The product development activities of Enento Group involve development of the

product and service offering. In 2020, the capitalised development and software

costs of the Group amounted to EUR 11,1 million (EUR 11,6 million). Capitalised de-

velopment and software costs consist of costs related to the Group’s product and

service offering as well as intangible IT infrastructure. The Group had no material

research activities in 2020.

Personnel

At the end of the financial year, Enento Group had a total of 425 (422) employees,

of whom 173 (172) were employed by the Group companies in Finland, 205 (210) by

the Swedish subsidiary, 45 (39) by the Norwegian subsidiary and 2 (1) by the Danish

subsidiary. Of the Group’s personnel, 3 (6) worked in management, 170 (115) in busi-

ness areas, 120 (167) in Sales Units and Marketing and Communications, 94 (95) in IT

and Technology and 38 (39) in Finance and HR. The table below presents Enento

Group’s number of employees as well as wages and salaries for 2018–2020.

Key figures describing the Group’s personnel

Personnel

2020 2019 2018

Average number of personnel 430 428 315

Full time 417 417 305

Part time and temporary 13 11 10

Geographical distribution

Finland 176 162 162

Sweden 207 246 153

Norway 45 19 -

Denmark 2 1 -

Wages and salaries for the financial year (EUR million) 2 7, 4 28,5 20,2

The Group’s personnel expenses for the financial year 2020 amounted to EUR 36,8

million (EUR 38,6 million). This figure includes an accrued cost of EUR 0,7 million (EUR

0,9 million) from the management’s long-term incentive plan. More information on

the management’s long-term incentive plan is provided in note 27 Related parties

in the notes to the consolidated financial statements.

In June 2018, 344 employees were transferred to the Group as a result of the

UC acquisition and in July 2019, approximately 60 employees as a result of the

acquisition of the Proff companies.

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Enento Group Plc and UC Affärsfakta AB signed an agreement regarding the

outsourcing of Affärsfakta’s telesales operations on 14 May 2019. Enento Group

transferred its Swedish telesales operations to Affärsfakta i Sverige AB, a company

established by the management of UC Affärsfakta AB, effective from 1 September

2019. As a result of the outsourcing move, approximately 100 employees from the

Swedish telesales unit were transferred to Affärsfakta i Sverige AB with their cur-

rent benefits and obligations.

Shares and shareholders

Enento Group Plc has one share class. Each share carries one vote at the Gen-

eral Meeting of Shareholders and each share confers equal right to dividends

and net assets of the Company. The shares have no nominal value. The shares

of the Company are entered in the book-entry securities system maintained by

Euroclear Finland Ltd.

A total of 13 769 new shares were subscribed for in Enento Group Plc’s share

issue directed to the company key personnel without payment. The shares were

registered in the Trade Register on 26 February 2020. After the registration, the

company’s shares totalled 24 007 061. The new shares produce the right to div-

idends and other distribution of assets as well as other shareholder rights as of

the registration date 26 February 2020. Trading in the new shares commenced on

27 February 2020.

At the end of financial year, the Company’s share capital amounted to EUR

80 thousand (EUR 80 thousand) and the total number of shares was 24 007 061

(23 993 292).

The Company did not hold any of its own shares at the end of the financial

year. The Annual General Meeting of Shareholders on 12 June 2020 authorised the

Board of Directors to decide on the repurchase of a maximum of 1 500 000 own

shares of the Company. The authorisation replaced the corresponding author-

isation issued to the Board of Directors by the Annual General Meeting held on

28 March 2019. The maximum amount corresponds to approximately 6,2 % of the

Company’s shares and voting rights. The authorisation is effective for 18 months

from the date of the resolution. Further information on the authorisation is provid-

ed under “Authorisations of the Board of Directors”.

Share price and volume

During the financial year, a total of 6 757 380 (2 509 597) shares were traded, and

the total value of the exchanged shares was EUR 215,1 million (EUR 66,6 million). The

highest share price during the financial year was EUR 40,30 (EUR 34,70), the lowest

price was EUR 24,20 (EUR 22,00), the average price was EUR 31,83 (EUR 26,56) and

the closing price was EUR 33,60 (EUR 31,50). Market capitalisation measured at the

closing price of the financial year was EUR 806,6 million (EUR 755,8 million).

Shareholders

According to the book-entry securities system, the Company had 3 070 (2 726)

shareholders, including 8 (8) nominee-registered shareholders, on 31 December

2020. A list of the largest shareholders is available on the Company’s investor

pages at enento.com/investors.

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Significant shareholders on 31 December 2020

Shareholder Number of shares % of shares

1 Skandinaviska Enskilda Banken AB (Publ) Helsinki Branch

6 931 368 28,87

2 Sampo Plc 2 920 000 12,16

3 Skandinaviska Enskilda Banken AB (Publ) 2 441 920 10,17

4 Nordea Bank ABP 2 303 315 9, 59

5 Nordea Bank ABP

2 096 317 8,73

6 Fjarde AP-Fonden 678 132 2,82

7 Mutual Pension Insurance Company Ilmarinen 655 000 2,73

8 SR Danske Invest Finland Equity 546 624 2,28

9 Mutual Pension Insurance Company Elo 461 455 1,92

10 Mutual Fund Nordea Nordic Small Cap 404 561 1,69

11 Mutual Pension Insurance Company Kaleva 370 907 1,54

12 Mutual Pension Insurance Company Elo 345 000 1,44

13 Mutual Fund Evli Finnish Small Cap 248 500 1,04

14 Clearstream Banking S.A.

212 659 0,89

15 Church Pension Fund 199 308 0,83

16 Föreningen Konstsamfundet r.f. 190 000 0,79

17 Danske Bank A/S Finnish branch

165 044 0,69

18 SEB Finland Small Cap 156 848 0,65

19 OP-Finland Mutual Fund 154 842 0,64

20 Mutual Fund Säästöpankki Kotimaa 143 262 0,60

20 largest shareholders total 21 625 062 90,08

All shares

24 007 061 100,00

Nominee-registered.

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Shareholder structure by sector, 31 December 2020

Sector

Number of shareholders % of shareholders Number of shares % of shares

Finance and insurance institutions 38 1,24 % 8 659 466 36,07 %

Foreign shareholders 11 0,36 % 11 867 109 49,43 %

General government 9 0,29 % 1 569 445 6,54 %

Households 2 639 85,96 % 952 195 3,97 %

Companies and housing companies 282 9,19 % 661 733 2,76 %

Non-profit organisations 91 2,96 % 297 113 1,24 %

Total 3 070 100 % 24 007 061 100 %

The information is based on the list of the Company’s shareholders maintained by Euroclear Finland Ltd. Each nominee-registered shareholder is registered as one

shareholder. It is possible to manage several shareholders’ portfolios through one nominee-registered shareholder.

Management’s share ownership on 31 December 2020

Board of Directors

Number of shares

Lapveteläinen Patrick, Chairman of the Board 10 000

Related party’s ownership 8 000

Carpén Petri 0

Related party’s ownership 0

Johansson Martin 0

Related party’s ownership 0

Kuusisto Tiina 0

Related party’s ownership 0

Månsson Carl-Magnus 0

Related party’s ownership 0

Parhiala Minna 0

Related party’s ownership 0

Total 18 000

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Management

Number of shares

Ruuska Jukka, CEO 82 356

Related party’s ownership 0

Hane Siri 2 095

Related party’s ownership 0

Karemo Mikko 10 590

Related party’s ownership 0

Koivula Heikki 16 029

Related party’s ownership 0

Olofsson Jörgen 1 144

Related party’s ownership 0

Preger Victoria 2 145

Related party’s ownership 0

Stråhlman Elina 2 250

Related party’s ownership 0

Werner Karl-Johan 2 145

Related party’s ownership 0

Ylipekkala Heikki 4 250

Related party’s ownership 0

Öhlander Eleonor 2 145

Related party’s ownership 0

Total 125 149

Auditor

Number of shares

Grandell Martin, auditor in charge 0

Related party’s ownership 0

Total 0

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Management

Board of Directors

The Company’s Board of Directors consists of a minimum of four and maximum

of eight members. The Annual General Meeting elects the Board members and

decides on their remuneration. The Board of Directors elects the Chairman of

the Board and also, if necessary, the Vice Chairman of the Board from among its

members. The term of office of the Board members ends at the conclusion of the

first Annual General Meeting following their election. There are no limitations to

the number of terms a person can be a Board member.

Enento Group Plc’s Annual General Meeting held on 12 June 2020 confirmed

the financial statements and discharged the Board members and CEO from lia-

bility for the financial year ended 31 December 2019. The Annual General Meet

ing resolved that the Chairperson of the Board of Directors be remunerated EUR

51 000 annually and that the members of the Board of Directors be remunerat-

ed EUR 36 000 annually. In addition, an attendance fee of EUR 500 is paid for

attending a Board meeting. For attending the Board Committee meetings, the

Chairpersons of the Committees will be remunerated EUR 500 per meeting and

the Committee members will be remunerated EUR 400 per meeting.

In accordance with the proposal of the Shareholders’ Nomination Board, the An-

nual General Meeting of 12 June 2020 re-elected Petri Carpén, Patrick Lapveteläin-

en, Carl-Magnus Månsson, Martin Johansson and Tiina Kuusisto as members of the

Board of Directors. Minna Parhiala was elected as a new member of the Board of

Directors. Following these elections, the Board of Directors consisted of six members.

In its organisational meeting held on 12 June 2020, the Board of Directors elected

Patrick Lapveteläinen as the Chairman of the Board. The Board of Directors met 10

times in 2020. In addition, on three occasions, pursuant to Chapter 6, Section 3 of the

Companies Act, the Board of Directors made a decision without holding a meeting.

Board Committees

The Board of Directors appoints two committees from among its members: i) the

Audit Committee and ii) the Nomination and Remuneration Committee. The Board

of Directors may also appoint other committees, if deemed appropriate. The

committees assist the Board of Directors by preparing and drawing up proposals

and recommendations for the Board of Director’s consideration.

On 12 June 2020, the Board of Directors re-nominated Petri Carpén, Carl-

Magnus Månsson and Martin Johansson as members of the Audit Committee.

Petri Carpén continued as the Chairman of the Audit Committee.

The Nomination and Remuneration Committee consists of at least three mem-

bers. On 12 June 2020, the Board of Directors decided not to appoint the Nomi-

nation and Remuneration Committee.

Authorisations of the Board of Directors

Share issue authorisation 12 June 2020

The Annual General Meeting of Shareholders held on 12 June 2020 authorised

the Company’s Board of Directors to decide on one or more share issues, in

cluding the right to issue new shares or transfer shares held by the Company.

The maximum number of shares covered by the authorisation is 1 500 000. The

Board of Directors was also authorised to decide on a directed share issue. The

authorisation can be used for material arrangements from the Company’s point

of view, such as financing or implementing business arrangements or investments

or for other purposes determined by the Board of Directors, in which case there

would be a significant financial reason for issuing shares, potentially in the form

of a directed share issue.

Company’s Board of Directors was authorised to decide on all other share is-

sue conditions, including payment term, specification grounds for subscription of

shares and subscription price or issue shares without payment or that subscription

price can be paid by cash, but also fully or partially by other property.

The authorisation is effective for 18 months from the close of the Annual Gener-

al Meeting, until 12 December 2021. The authorisation replaced the corresponding

authorisation issued to the Board of Directors by the Annual General Meeting held

on 28 March 2019.

Enento Group Plc’s Board of Directors decided on 10 February 2020 on a di-

rected share issue related to the reward payment from the performance peri-

od 2018–2019 of the Matching Share Plan 2018. In the share issue, approximately

13 769 new Enento Group Plc shares will be issued without consideration to the key

employees participating in the Matching Share Plan 2018 in accordance with the

terms and conditions of the plan. The decision on a directed issue of shares was

based on the authorisation given to the Board of Directors by the Annual General

Meeting on 28 March 2019.

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Enento Group Plc’s Board of Directors decided on 12 February 2021 on a di-

rected share issue related to the reward payment from the performance period

2018–2020 of the Matching Share Plan 2018. In the share issue, approximately

28 000 new Enento Group Plc shares will be issued without consideration to the

key employees participating in the Matching Share Plan 2018 in accordance with

the terms and conditions of the plan. The decision on a directed issue of shares

was based on the authorisation given to the Board of Directors by the Annual

General Meeting on 12 June 2020.

Authorisation for repurchasing own shares 12 June 2020

The Annual General Meeting authorised the Board of Directors to decide on the re-

purchase of maximum of 1 500 000 company’s own shares, in one or several instal-

ments. The shares will be repurchased with the Company’s unrestricted sharehold-

ers’ equity, and the repurchases will reduce funds available for the distribution of

profits. The shares can be repurchased for example to develop the company’s cap-

ital structure, carry out or finance potential corporate acquisitions or other business

arrangements, to be used as a part of the company’s incentive programme or to

be otherwise conveyed further, retained as treasury shares, or cancelled.

In accordance with the resolution of the Board of Directors, shares may be

repurchased also in a proportion other than that in which shares are owned

by the shareholders (directed acquisition) at the market price of the shares at

marketplaces on which the company shares are traded or a price otherwise

established on the market at the time of the repurchase. The Board of Directors

decides how shares are repurchased. Among other means, derivatives may be

used in acquiring the shares. According to the authorisation, the Board of Direc-

tors decides on any other matters related to the repurchase of shares.

The authorisation is effective for 18 months from the close of the Annual Gen

eral Meeting, until 12 December 2021. The authorisation replaced the corre

sponding share repurchase authorisation issued to the Board of Directors by the

Annual General Meeting held on 28 March 2019. The authorisation has not been

used as of 12 February 2021.

The Company publishes a separate Corporate Governance Statement.

CEO and Executive Team

Jukka Ruuska served as the Chief Executive Officer (CEO) of the Company in

2020. At the end of the financial year 2020, the other members of the Execu

tive Team were Heikki Koivula (Risk Decisions), Siri Hane (SME and Consumers),

Karl-Johan Werner (Customer Data Management), Heikki Ylipekkala (Digital

Processes), Mikko Karemo (Sales Units), Victoria Preger (Marketing and Commu-

nications), Jörgen Olofsson (IT and Technology), Elina Stråhlman (Finance) and

Eleonor Öhlander (HR).

Auditor

Authorised Public Accountants PricewaterhouseCoopers Oy served as the Com-

pany’s auditor in 2020. The auditor in charge was Martin Grandell, Authorised

Public Accountant.

Loans, Liabilities and Commitments to Third Parties

Enento Group Plc has a loan agreement on a total of EUR 180 million of financing

with Danske Bank A/S, OP Corporate Bank Plc and Nordea Bank Plc. The agree-

ment consists of a term loan of EUR 160 million and a revolving credit facility of EUR

20 million. The Company took out the term loan partly in EUR and partly in SEK

in accordance with the terms of the loan agreement. At the end of the financial

year, the Company had used EUR 0 (EUR 0 million) of its credit facility. The loans

will mature in one instalment in October 2023.

To facilitate efficient cash management in the Group, a multi-currency cash

pool arrangement has been implemented with Danske Bank A/S. An overdraft of

EUR 15,0 million is included in the cash pool arrangement. The overdraft had not

been utilised on 31 December 2020.

Enento Group’s cash and cash equivalents on 31 December 2020 amounted to

EUR 26,2 million (EUR 20,4 million).

Further information on loans, liabilities and commitments to related parties is

provided in note 23 Financial liabilities, note 26 Contingent liabilities and note 27

Related parties in the consolidated financial statements.

Group Structure and Organisation

At the end of the financial year, Enento Group consisted of Enento Group Plc, its

wholly-owned subsidiaries Suomen Asiakastieto Oy, Emaileri Oy, Proff AS and Proff

ApS as well as UC AB and its wholly-owned subsidiaries UC Affärsinformation AB

and Proff AB.

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Enento Group acquired the shares of the business information service Proff

in Norway, Sweden and Denmark under an agreement signed on 20 May 2019.

The transaction was completed on 1 July 2019. More detailed information on the

acquisition is presented under Note 5 Corporate Acquisitions in the notes to the

consolidated financial statements.

Enento Group’s organisation consists of two types of units: business areas and

functional units. The business areas are responsible for the Group’s service offering

and the functional units for the production, maintenance and active development of

the operations in their own focus area and business processes. The functional units

are Sales Units, Marketing and Communications, IT and Technology, HR, and Finance.

Legal proceedings

Disputes arise from time-to-time in the course of day-to-day operations of Enen-

to Group. On 16 August 2019, Enento Group Plc announced it had received a claim

for additional compensation from Eniro AB in relation to Enento’s acquisition of

Proff companies from Eniro’s subsidiaries Eniro Sverige AB, Eniro Holding AS and

Eniro Danmark A/S. Eniro presented in its claim that the purchase price set out in

the agreement and upon which the transaction was consummated was incorrect

due to a “clerical error” on Eniro’s side. The transaction was announced on 20 May

2019 and it entered into effect on 1 July 2019. Enento Group deemed the claim to

be without any merit.

The dispute was settled by the Arbitration Institute of the Stockholm Chamber

of Commerce. The arbitration award was given on 1 October 2020 and, accord-

ing to the award, Enento Group paid Eniro SEK 23,713,421 and interest until the

payment date and costs relating to the arbitration for EUR 131,874. Enento Group

presented the awarded payment in items affecting comparability in the fourth

quarter of 2020.

Enento Group was not party to any other material litigation or administrative

proceeding in 2020 that may have a material effect on its financial position or

profitability. The Company is not aware of any material such proceedings being

pending or threatened.

Events after the reporting date

On 14 January 2021, Enento Group Plc announced its plan of changing the busi-

ness area structure and creating a new Data and Analytics unit. The change in

the organisational structure is aimed at enabling faster and smoother strategy

implementation and highlighting the importance of data and analytics.

Enento Group currently has four business areas: Risk Decisions, Customer Data

Management, SME & Consumers and Digital Processes. The new organisational

structure consists of three business areas: Business Insight, Consumer Insight and

Digital Processes. These new business areas replace the current ones (Risk De-

cisions, Customer Data Management and SME and Consumers), with the Digital

Processes business area remaining unchanged.

Heikki Koivula, the Director of the current Risk Decisions business area, will be

in charge of the new Business Insight business area. Siri Hane, the Director of the

current SME and Consumers business area, will be in charge of the new Consum-

er Insight business area. During Siri Hane’s parental leave, Gabriella Göransson

(Head of Risk Decisions Sweden) will deputise for Siri Hane during the period 1 April

– 1 October 2021. During this period, Gabriella Göransson will also be a member

of Enento Group’s Executive Team. Heikki Ylipekkala will remain in charge of the

Digital Processes business area.

The new Consumer Insight business area will focus on customer-driven con-

sumer information services, while the new Business Insight business area will focus

on business information services.

The new Data and Analytics functional unit will be led by Chief Data & Ana-

lytics Officer Karl-Johan Werner. The current Customer Data Management busi-

ness area led by Karl-Johan Werner will be included in the new business areas.

Karl-Johan Werner will continue as a member of Enento Group’s Executive Team.

The organisational change does not include any plans for personnel redun-

dancies, but it does require statutory cooperation negotiations in Finland and

Sweden. The negotiations will begin immediately. The new organisational struc-

ture will enter into effect on 1 April 2021.

Report on non-financial information

Enento Group’s Board of Directors and management are responsible for the man-

agement of corporate responsibility. Enento Group complies with laws and reg-

ulations of its operating countries, the Articles of Association, rules and guideline

of Nasdaq Helsinki and Corporate Governance Code for listed companies in its

administration. In practical work, responsibility issues are guided by the Group’s

Code of Ethics. Furthermore, operations are governed by policies and operating

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practices approved by the Board of Directors and Executive Team. All the part-

ners must also conform to the laws and agreements. The Code of Ethics, along

with key Group-level policies and guidelines, is published online on the Company’s

investor pages.

Enento Group’s business model and governance

Enento Group’s mission is to maintain and build trust in the markets: in trading and

the concluding of agreements between companies as well as between compa-

nies and private parties. Trust is created through the provision of services that

help companies verify the reliability of their contractual counterparties. The foun-

dation for these services consists of Enento Group’s Nordic databases of up-to-

date information on companies and consumers. The digital services refined from

this data improve the efficiency of customers’ operations, increase responsibility

and reduce the Group’s carbon footprint.

The Group’s operations are guided by

• The strategy approved by the Board of Directors

• The Group’s annual budget and action plan

• The Group’s management and governance model

The quality management system of Suomen Asiakastieto Oy, a subsidiary of Enento

Group Plc, has been certified since 2015 and the certificate has been subsequently

renewed in 2018 and January 2021. In the certification audit, the system was found

to be compliant with the 9001:2015 standard and the certificate is valid for three

years. The key processes defined in the system are related to the customer-driv-

en development and management of products and services. The performance

indicators of the quality management system are the results of the audits, which

monitor, for example, development measures, best practices, quality deviations

and quality accidents. There were eight implemented development measures and

six identified best practices in 2020. There were 11 quality deviations and seven

quality accidents observed in the audits. Corrective measures and their follow-up

measures have been prepared to remedy the above-mentioned defects.

Enento Group’s strategy 2020–2023 and sustainability

Enento Group’s Board of Directors approved the Group’s new strategy for 2020–

2023 on 8 May 2020. The Group aims for growth and increased profitability by

strengthening its current position and seizing new opportunities within credit in-

formation, business information and the digitalisation of data-related processes.

Focusing on innovation, building a future-fit innovative organisation and devel-

oping a Nordic IT platform will enable Enento to achieve these goals.

Enento has three main goals for the strategy period: to retain and strengthen

its leading position in the credit information business, to become the number-one

choice in data-driven business processes as a service, and to become the leader

in business information.

Sustainability is at the core of Enento’s business. The Group contributes to sus-

tainability in society by, for example, preventing over-indebtedness and help-

ing customers make responsible and sustainable decisions. The aim is to create

a broad Nordic offering of sustainability services to support customers’ deci-

sion-making. Enento has set a group-level target of zero net emissions by 2023.

Environmental issues

The Group’s emission target is ambitious, and it can only be achieved by com-

prehensively specifying and calculating the Group’s total carbon footprint. The

carbon footprint calculation provides an understanding of the Group’s emission

sources and amounts. Based on the calculation, practical measures will be se-

lected to achieve the net zero emission target and monitor progress. The speci-

fication and calculation effort has begun in partnership with the Sweden-based

consulting company GoClimate. Enento Group will publish a separate sustaina-

bility report on 2020 by the end of the second quarter of 2021.

The carbon footprint of Enento Group’s own operations is low. The Group’s

overall impact on society is very positive. Prior to the COVID-19 pandemic, the

most significant environmental impacts arose from business travel, the energy

consumption of offices and IT service production. There are no significant risks

associated with the Group’s environmental aspects.

Enento Group’s largest offices are located in Helsinki (headquarters) and Stock-

holm. Both of the Group’s offices are in locations with good public transport con-

nections. They are modern activity-based offices in which fewer heated square

metres per employee are needed. The lessors of both of the premises monitor elec-

tricity consumption, the use of warm and cold water, district heating, district cool-

ing and waste management on a monthly basis. More detailed figures comparing

2019 and 2020 will be published in Enento Group’s separate sustainability report.

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Due to the nature of Enento Group’s digital service production, data process-

ing accounts for part of the Group’s overall emissions. The equipment in the data

centre environment in Finland are mainly virtualised and placed in a large data

centre complex, which makes it possible to minimise the overall energy consump-

tion. The data centre complex in Finland switched to renewable energy at the

beginning of 2021. All three of the Group’s data centres in Sweden also use re

newable energy, which means that their carbon dioxide (CO2) emissions are zero.

More detailed annual comparison figures will be published in Enento Group’s sep-

arate sustainability report.

Social and employee-related issues

In 2020, the number of people employed by Enento Group was 425, of whom 173

worked in the Finnish companies, 205 in the Swedish companies, 45 in the Norwe

gian company and two in the Danish company.

Enento Group emphasises competence development, community spirit as well

as the development of leadership and management in its approach to social re-

sponsibility. The Group’s goal is to be an attractive employer that offers interesting

jobs for people representing various competence backgrounds. Enento Group

offers opportunities for employees to develop their expertise or management skills

and seek new roles inside the Group within its Nordic offices. Recruitment is a

separate process supported by a separate recruitment system.

The Group ensures the fulfilment of its social responsibility through fair work-

ing conditions, remuneration and practices that are based on, among other

things, the Group’s Code of Ethics, Recruitment Policy, Remuneration Policy,

Working Environment Policy, Remote Work Policy and Diversity and Equality

Policy.

The quality of management, experience in the work community, clear work

objectives and competence are the key factors influencing the employees’ com-

mitment to work and well-being at work. In 2020, the Group established Learning

Organisation guidelines with the aim of establishing a Nordic work community in

which each employee receives encouragement and support to help them achieve

professional growth and success together with their colleagues. In 2020, the HR

team also worked on a Nordic competence and development model that will help

the Group perform even better with respect to the recruitment of new talent as

well as the development of employee competence.

The Group continued to implement the Nordic Supervisor Training Programme,

which supports supervisors with regard to change management, self-aware

ness, a coaching style of management and team leadership. This programme

has also played a significant role in building a unified team of supervisors. The

Grow Talk discussion process is part of the supervisor training programme. Grow

Talk discussions start with an annual personal target-setting discussion held in

the first quarter of the year. The target-setting discussion is followed by monthly

follow-up discussions with the supervisor and evaluation discussions held twice

a year. The purpose of the discussions is to create commitment and build an

understanding of how each employee contributes to the achievement of the

shared goals. Another purpose of the discussions is to ensure each employee’s

well-being and ability to develop in their work.

The Nordic Activity Group established to support a strong sense of community

within Enento Group continued to operate in 2020. The Nordic Activity Group

consists of active employees who plan and implement activities that promote

team spirit and well-being at work throughout the year.

The most recent Trust Index survey results showed that being a friend-

ly workplace is one of Enento Group’s biggest strengths. Furthermore, 86% of

the employees felt that working at Enento has a positive impact on society.

Suomen Asiakastieto Oy and UC AB are now Great Place to Work certified

companies.

Ensuring information security and privacy protection

Respecting privacy and ensuring information security are at the very core of

Enento Group’s operations and services. The Group processes data with care

and in full compliance with the law, and privacy protection is ensured in the

processing of personal data. Information security, privacy and confidentiality are

addressed in the Group’s Code of Ethics, Information Security Policy and Safety

Policy. Furthermore, the confidentiality obligation is included in the employment

agreement.

Respect for human rights

Enento Group operates in the Nordic countries, where respect for human rights

and equal treatment of people are generally at a very high level. At Enento Group,

the requirement that human rights and equality must be respected applies to

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personnel and partners alike. The Code of Ethics includes practices and proce-

dures for dealing with issues related to respect for human rights. There were no

suspected violations of human rights or violations related to discrimination or

other unfair treatment of employees observed in 2020.

The Group has a whistleblowing channel to enable employees to report sus-

pected violations anonymously.

Anti-corruption and bribery

Enento Group’s internal guidelines prohibit corruption and bribery. The Group’s

practices and procedures reduce opportunities for taking action that would be

contrary to the rules. The Code of Ethics includes practices and procedures for

dealing with issues related to corruption and bribery. No corruption or bribery cas-

es or other violations related to unethical business practices were reported in 2020.

Risks and uncertainties

Enento Group is exposed to a number of risks and uncertainties that are related,

for instance, to the market conditions and the Group’s industry, strategy, business

and financing. The realisation of such risks could have a considerable adverse

effect on Enento Group’s business, financial situation, performance and future

outlook.

Market and strategic risks

The demand for the Group’s products and services depends on the activity of the

business operations of its customers. Slow economic growth or a declining econ-

omy may result in a weakening demand for the services of Enento Group. In addi-

tion, regulatory changes that reduce the lending ability of the Group’s customers

may have a negative effect on the demand for the Group’s services and products.

Due to the COVID-19 pandemic, severe and extensive restrictions have been

placed at the state level in the Nordic countries. These restrictions have significant

impacts on economic activity. The Group has assessed the risks and uncertain-

ties arising from the restrictive measures. Due to the extraordinary situation, the

Group’s ability to predict the potential effects on the demand for its services has

been reduced. The potential business impacts of the pandemic-related risks that

affect demand factors are managed by proactive cost adaptation measures and

contingency plans.

Enento Group operates in a number of product and service markets in which

competition is continuously becoming tougher and customers’ needs keep chang-

ing. Information services are available more easily than before. This is primarily at-

tributable to better availability of public information, increase of digital information

and new service providers, who may increase competition in the markets. Better

availability of information may also provide the Group’s customers with better op-

portunities for in-house development of services, such as analysis services.

Tendering carried out by customers and general cost-awareness may put

some pressure for lower prices on the Group’s markets. In addition, price pressures

caused by Enento Group’s competitors may have a negative effect on the Group’s

margins and result and hamper its opportunities to acquire new customers on the

current terms and conditions.

No customer of the Group accounted for more than ten per cent of the Group’s

total invoicing in 2020. Even though the Group’s customer base is diverse, the loss

of one or more major customers or a significant decrease in sales to one or more

such customers for any reason could have a very harmful effect on the Group’s

business, financial position, business result and future outlook.

The gathering, storage and use of information is subject to strict regulations,

and in Sweden a licence is required for certain operations of the Group, such

as credit register-related operations. In addition, according to UC’s shareholder

agreement, UC’s minority shareholders may veto certain decisions concerning

UC’s credit register and the control of credit register data. This may restrict Enen-

to Group’s possibilities to materially change business operations related thereto.

The Group and its employees must also comply with numerous other laws and

regulations. Changes to the regulatory framework may require Enento Group to

adapt its service offering or strategy. Any actions in breach of regulations con-

cerning operations subject to a licence may lead to changing of Enento Group’s

operations, imposing additional conditions to the licence or cancellation of the

licence. The above may also lead to higher costs, force the Group to stop provid-

ing some products or services, or prevent or delay development of its operations,

or the Group may end up in legal proceedings or become subject to legal claims.

In order to achieve synergies, Enento Group must carry out extensive and cor-

rectly timed integration work on acquired businesses, particularly UC. Failure of

integration, unexpected costs or delays in schedule may lead to partial or total

non-achievement or the synergies and advantages expected of the acquisitions.

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In the future, the Group may also seek growth through M&A transactions or pro-

vide more services also outside its current countries of operation. M&A transac-

tions and geographical expansion involve many risks that may have an effect on

the Group’s future business.

Enento Group has a lot of goodwill recognised on acquisitions. Impairment of

goodwill and other assets could have a material effect on the Group’s reported

result.

Operational risks

In its business, Enento Group relies on information from external sources, such as

government offices and other public sources, customers and other sources. If one

or more of them stopped providing information for any reason or considerably in

creased the price of the information provided, this could have a harmful effect on

Enento Group’s ability to offer its products and services to its customers.

Enento Group believes that its continued success will be influenced by its ability

to meet customers’ needs through the development of products and services that

are easy to use and that seek to increase customers’ business process efficiency,

offer cost savings, and facilitate better business decisions. The Group’s financial

result may suffer if the development of new products or services or improvements to

existing products are delayed for reasons related to possible technical challenges,

problems related to external IT development resources, information acquisition or

regulatory requirements.

Enento Group has invested and will continue to invest in its technical infrastruc

ture, including equipment and software. If Enento Group fails in its technological in-

vestments, its income may not develop as expected and its expenses may increase.

In addition, the Group may end up in an unfavourable competitive position in the

market if it cannot, for example, offer certain new products and services or gather

certain type of new information.

Safe and uninterrupted functioning of Enento Group’s IT network and systems

is critical for the company’s business. Unauthorised access to or disclosure of in-

formation as well as loss or abuse of information may lead to a breach of data

protection and other applicable laws by Enento Group, harm to reputation, loss

of income, claims or measures taken by the authorities.

Despite testing and information quality control, products and services devel-

oped and supplied by Enento Group as well as the operating systems and soft-

ware it uses may contain errors or faults. Material defects or errors in the Group’s

information, products or services as well as delays in providing products and ser-

vices may harm its reputation or lead to loss of income, increased costs, regulato-

ry measures or legal claims. Enento Group’s IT network and infrastructure may be

exposed to damage and problems resulting from many reasons. Such damage or

problem may lead to a failure of Enento Group’s IT infrastructure, which in turn may

complicate the company’s work and lead, for instance, to breaches of contract.

The Group’s brands and reputation are important competitive advantages.

The company’s success is also based on its own technologies, processes, methods

and information. The company protects its intellectual rights with trademarks and

domain names, for instance, and by relying on business secrets and the develop-

ment of products and technology. Failure to protect intellectual rights, damage to

reputation or negative views of the company in the market may have a negative

effect on the company.

Enento Group’s success also depends on its management and other profes-

sional personnel as well as its ability to recruit competent personnel and develop,

train and retain them. The Group’s inability to retain or recruit new employees may

have a material harmful effect on the Group.

Successful implementation of Enento Group’s strategy depends on a number of

factors, some of which are completely or partially beyond the company’s control.

Costs related to the implementation of the strategy or failure to implement it may

have a harmful effect on the Group’s business.

The Group’s tax burden depends on applicable laws and decrees as well as

their application and interpretation. Amendments to tax laws and decrees or their

interpretation may increase the Group’s tax burden, which in turn may affect the

Group’s financial result.

Enento Group has taken out insurances to cover various risks or loss events. The

Group’s insurance coverage may be insufficient or the Group may not be able to

maintain its current insurance coverage, in which case the company may suffer

losses not covered by its insurances.

Enento Group is exposed to various financial risks, including currency exposure,

interest rate risk and solvency risk. The Group’s financing risks and their manage-

ment are described in note 4 in Notes to the consolidated financial statements.

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Financial targets, Dividends and Outlook

Financial targets

The Board of Directors of Enento Group has adopted long-term financial targets

and dividend policy for the Group. The long-term financial targets are:

• Growth: 5 to 10 per cent annual average net sales growth

• Profitability: Adjusted EBITDA growth rate exceeding net sales growth rate

• Balance sheet structure: Net debt to Adjusted EBITDA below 3x while

maintaining an efficient capital structure

Dividend Policy

The Company’s dividend policy is to distribute as dividends at least 70 per cent of

the Company’s net profit, whilst, taking into consideration the business develop-

ment and investment needs of the Group. Any dividends to be paid in future years,

their amount and the time of payment will depend on Enento Group’s future earn

ings, financial condition, cash flows, investment needs, solvency and other factors.

Enento Group distributed funds to its shareholders totalling EUR 22 807 thou-

sand for the financial year 2019 and EUR 22 794 for the financial year 2018. The

dividend and capital repayment was EUR 0,95 per share for both the financial

year 2019 and the financial year 2018.

Pursuant to the Companies Act, the Annual General Meeting of Shareholders

resolves on the distribution dividend based on the Board of Directors’ proposal.

Dividends are typically distributed once per financial year, and dividends can only

be distributed once the Annual General Meeting of Shareholders has approved

the financial statements. If dividends are distributed, all shares confer equal rights

to dividends.

Proposal for the Distribution of Funds

At the end of the financial year 2020, the distributable funds of the Group’s parent

company amounted to EUR 390 594 628,13, of which the profit for the financial

year was EUR 23 332 702,86. The Board of Directors proposes to the Annual Gen-

eral Meeting convening on 29 March 2021 that funds amounting to EUR 0,95 per

share, total EUR 22 806 707,95, based on the Company’s registered total number of

shares at the time of the proposal, be distributed for the financial year that ended

on 31 December 2020 as follows:

EUR / share EUR

From the invested unrestricted equity reserve as a

repayment of capital 0,95 22 806 707,95

To be retained in unrestricted equity 367 787 920,18

Total 390 594 628,13

The equity repayment from the reserve for invested unrestricted shareholders’ eq-

uity will be paid to a shareholder registered in the Company’s shareholders’ reg-

ister held by Euroclear Finland Ltd on the payment record date of 31 March 2021.

The Board of Directors proposes that the funds be paid on 12 April 2021.

The remunerations to be paid on the basis of the Company’s management’s

long-term incentive plan 2018–2020 are further expected to result in the issuance

of approximately 28 000 new shares in Enento Group Plc, entitling to the distri-

bution of funds from the financial year 2020. Thus, the proposed total amount of

distributed funds would increase by approximately EUR 27 000.

Future outlook

• Net Sales: Enento Group expects its net sales growth in 2021 to be in the

long-term target range (5-10%) but somewhat lower than the mid-point of the

target range.

• EBITDA: Enento Group expects its adjusted EBITDA margin to improve

somewhat in 2021 compared to previous year.

• Capital Expenditure: Enento Group expects its capitalised product

development and software expenses in 2021 to exceed the previous year’s level.

The outlook is based on the assumption that exchange rates remain at the cur-

rent level.

The future outlook is subject to risks related to, among other factors, the eco-

nomic development of Enento Group’s countries of operation and the devel

opment of the Group’s business operations. The most significant risks related to

business operations include, for example, risks related to the success of product

and service development activities, launches of new products and services and

risks related to competitive tenders and to losing significant customer accounts.

2020 Enento Group FINANCIAL REVIEW | 18

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CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

Key income statement and cash flow figures and ratios

EUR million (unless otherwise mentioned)

2020 2019 2018

Net sales 151,3 146,0 98,1

EBITDA 4 9, 1 48,3 26,7

EBITDA margin, % 32,5 33,1 2 7, 2

Adjusted EBITDA 54,0 51,5 36,1

Adjusted EBITDA margin, % 35,7 35,3 36,8

Operating profit (EBIT) 2 7, 8 2 7, 8 16,7

Operating profit (EBIT) margin, % 18,4 1 9,0 1 7,0

Adjusted EBIT

45,0 42,6 32,0

Adjusted EBIT margin, %

29,7 29,2 32,7

Free cash flow

32,6 32,1 15,9

Cash conversion, %

66,3 66,4 5 9, 6

Net sales from new products and services

8,5 5,9 8,6

New products and services of net sales, %

5,6 4,0 8,8

Key balance sheet ratios

EUR million (unless otherwise mentioned)

2020 2019 2018

Balance sheet total 552,5 543,3 545,9

Net debt 143,0 148,1 137,0

Net debt to adjusted EBITDA, x4 2,6 2,9 n/a

Return on equity, % 6,2 6,2 5,4

Return on capital employed, % 5,8 5,8 5,2

Equity ratio, % 58,3 58,3 5 9, 6

Gearing, % 45,4 4 7, 7 42,6

Gross investments 12,0 12,4 5,6

Key financial information for the Group

The method used for calculating the adjusted operating profit (EBIT) has been changed from 1 January 2018 so that also amortisation from fair value adjustments related to the acquisitions and external expenses

arising from significant regulatory changes are taken into account as items to be adjusted.

The method for calculating the share of new products and services has been changed from 1 January 2018 so that the total sales of products launched during the past 24 months are included in the shares. Previously,

the share was calculated as the net sales for products and services launched during the past 12 months added by the change in net sales for products and services launched during the preceding 12 months.

The method for calculating free cash ﬂow has been changed from 1 January 2018 so that the impact of paid taxes is no longer added to the cash ﬂow of business operations.

Resulting from the eect of the UC acquisition on the Group’s net debt, the relation of net debt for the financial year 2018 to adjusted EBITDA is not presented because it is not considered to be comparable.

2020 Enento Group FINANCIAL REVIEW | 19

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GOVERNANCE STATEMENT

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CONSOLIDATED

FINANCIAL STATEMENTS

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FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

Share-related key figures

EUR (unless otherwise stated)

2020 2019 2018

Earnings per share, basic 0,81 0,82 0,56

Earnings per share, diluted 0,81 0,82 0,56

Earnings per share, comparable

1,21 1,20 0,78

Equity per share 13,12 12,95 16,39

Dividend per share 0,95 0,95 0,95

Dividend per earnings, % 117,3 115,9 170,6

Effective dividend yield, % 2,8 3,0 3,9

Price per earnings 41,5 38,4 44,2

Share price development

Average price 31,83 26,56 2 7, 8 2

Highest price 40,30 34,70 32,60

Lowest price 24,20 22,00 21,10

Closing price 33,60 31,50 24,60

Market capitalisation, EUR million 806,6 755,8 589,3

Trading volume, pcs 6 757 380 2 509 597 3 533 838

Trading volume, % 28,15 10,5 18,0

Adjusted number of shares

Weighted average during financial year 24 004 917 23 986 073 19 603 022

At the end of the financial year 24 007 061 23 993 292 23 953 964

Number of shares adjusted for share issue, diluted

Weighted average during financial year 24 029 391 24 013 292 19 649 487

At the end of the financial year 24 031 536 24 020 511 24 000 429

The comparable earnings per share do not contain amortisation from fair value adjustments related to the acquisitions or their tax impact.

2020 Enento Group FINANCIAL REVIEW | 20

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FINANCIAL STATEMENTS

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FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

Alternative performance measures used in financial reporting

Enento Group Plc discloses a summary on the use of alternative performance

measures used by the Group, definitions of the performance measures used and

their matching with the IFRS financial statements figures in accordance with the

ESMA (European Securities and Markets Authority) Guidelines on Alternative Per-

formance Measures

Enento Group Plc presents alternative performance measures as additional in-

formation for key performance measures in the consolidated statements of income,

financial position and cash flows prepared according to IFRS to reflect the financial

development of its business operations and to enhance comparability from period

to period. According to the management’s view, alternative performance measures

provide substantial supplemental information on the result of the Group’s opera-

tions, financial position and cash flows to the management and investors, securities

analysts and other parties. Alternative performance measures are not, as such,

included in the consolidated financial statements prepared according to IFRS, but

they are derived from the IFRS consolidated financial statements by adjusting items

in the consolidated statements of income, financial position and cash flows and/or

by proportioning them to each other. Alternative performance measures should not

be considered as a substitute for measures in accordance with IFRS. Not all com-

panies calculate alternative performance measures in a uniform way, and thus the

alternative performance measures of the Company are not necessarily comparable

with similarly named performance measures of other companies.

Certain non-operational or non-cash valuation transactions with significant

income statement impact are adjusted as items affecting comparability, if they

arise from:

• M&A and integration-related expenses as one-off transactions

• negotiated redundancy payments omitted from the operative cost structure

• external expenses arising from significant regulatory changes as one-off

transactions

• compensation for damages as one-off transactions

• legal actions as one-off transactions

Alternative Performance Measure refers to a financial measure other than financial measure defined or

specified in IFRS norms.

Alternative performance measures are defined as follows:

• EBITDA

EBITDA is the profit (loss) for the financial year before (i) income taxes, (ii) finan-

cial income and expenditure and (iii) depreciation and amortisation.

• Adjusted EBITDA

Adjusted EBITDA is defined as EBITDA excluding items affecting comparability.

• Adjusted EBIT

Adjusted EBIT is defined as EBIT excluding items affecting comparability. The

method used for calculating the adjusted operating profit (EBIT) was changed

effective from 1 January 2018 due to the UC acquisition so that amortisation

from fair value adjustments related to acquisitions are also taken into account

as items to be adjusted. This redefinition of adjusted operating profit (EBIT) has

not had a material effect on the previously reported adjusted operating profit

(EBIT) figures.

• Net sales from new products and services

Net sales of new products and services include the total sales of products

launched during the past 24 months. New products and services are a signifi-

cant driver of growth in the company and consumer data market. The impact

of new products and services is especially important in times of poor economy,

because they dilute the impact of the poor economic situation on the demand

for current products and services. New products and services replace or update

old products and services. They are often more advanced than old products

and services, or they respond to potential market demand. In addition to cus-

tomer needs, the development of new products and services is also guided

by opportunities recognised by service providers. According to the Company’s

view, company and consumer data markets in its countries of operation are

somewhat immature compared to many European countries, and there is

potential for new products and services in the market.

• Free cash flow

Free cash flow consists of the cash flow from operating activities before (i) paid

interests and other financing expenses, (ii) received interests and other financing

income deducted by (iii) acquisitions of tangible and intangible assets. The

method used for calculating the free cash flow was changed effective from

1 January 2018 so that the impact of paid taxes is no longer added to the cash

flow of business operations.

2020 Enento Group FINANCIAL REVIEW | 21

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FINANCIAL STATEMENTS

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FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

• Cash conversion

Cash conversion is calculated by dividing free cash flow by EBITDA.

• Net debt

Net debt is calculated as difference of interest-bearing liabilities and cash

and cash equivalents. Interest-bearing liabilities include loans from financial

institutions (short- and long-term loans), and cash and cash equivalents include

short-term deposits, cash assets and bank accounts.

• Net debt to adjusted EBITDA

Net debt to adjusted EBITDA is calculated by dividing net debt by adjusted

EBITDA.

• Return on equity

Return on equity is calculated by dividing (i) profit (loss) for the financial year by

(ii) total equity (average for the financial year).

• Return on capital employed

Return on capital employed is calculated (i) by adding financial expenses to the

profit (loss) before taxes and (ii) by dividing the sum by the average of the differ-

ence of the balance sheet total and non-interest bearing debts of the opening

and closing balance sheet.

• Gearing

Gearing is calculated by dividing net debt by total equity.

• Equity ratio

Equity ratio is calculated by dividing (i) total equity by (ii) balance sheet total,

deducted by advances received.

• Gross investments

Gross investments are fixed asset acquisitions with long-term effect, from which

no sales of property or renunciation of business have been deducted. As a gen-

eral rule, fixed assets comprise property, plant and equipment and intangible

assets.

Purpose of use of alternative performance measures

EBITDA, adjusted EBITDA and adjusted EBIT are presented as alternative perfor-

mance measures, as they, according to the Company’s view, enhance the under-

standing of the Group’s results of operations and are frequently used by analysts,

investors and other parties.

Net sales from new products and services is presented as alternative perfor-

mance measures, as it, according to the Company’s view, describes the develop-

ment and structure of the Company’s net sales.

Free cash flow, cash conversion and gross investments are presented as alter-

native performance measures, as they provide, according to the Company’s view,

a good insight into the needs relating to the Group’s business cash flow and are

frequently used by analysts, investors and other parties.

Net debt, net debt to adjusted EBITDA, return on equity and return on capital

employed are presented as alternative performance measures, as they are, ac-

cording to the Company’s view, useful measures of the Group’s ability to obtain

financing and pay its debts, and they are frequently used by analysts, investors

and other parties.

Gearing and equity ratio are presented as alternative performance measures,

as they, according to the Company’s view, reflect the level of risk related to financ-

ing and help to monitor the level of capital employed in the Group’s business.

Comparable earnings per share is presented as an alternative performance

measure, as it, according to the Company’s view, helps to reflect the profit attrib-

utable to the owners.

2020 Enento Group FINANCIAL REVIEW | 22

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FINANCIAL STATEMENTS

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FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

Matching of alternative performance measures to the closest IFRS performance measure

Adjusted EBIT

EUR thousand

2020 2019 2018

Operating profit 27 816 27 782 16 704

Amortisation from fair value adjustments related to acquisitions 12 252 11 572 5 915

Items affecting comparability

M&A and integration related expenses 1 984 1 961 7 266

Redundancy payments 161 1 202 1 935

Additional payment for acquisition, arbitration institute decision 2 264 - -

External expenses arising from significant regulatory changes - - 142

Compensation paid for damages - - 80

Legal actions 481 99 -

Total items affecting comparability 4 890 3 263 9 424

Adjusted operating profit 44 958 42 616 32 042

EBITDA and adjusted EBITDA

EUR thousand

2020 2019 2018

Operating profit 27 816 27 782 16 704

Depreciation and amortisation 21 311 20 503 9 995

EBITDA 49 127 48 284 26 699

Items affecting comparability

M&A and integration related expenses 1 984 1 961 7 266

Redundancy payments 161 1 202 1 935

Additional payment for acquisition, arbitration institute decision 2 264 - -

External expenses arising from significant regulatory changes - - 142

Compensation paid for damages - - 80

Legal actions 481 99 -

Total items affecting comparability 4 890 3 263 9 424

Adjusted EBITDA 54 017 51 547 36 122

Free cash flow

EUR thousand

2020 2019 2018

Cash flow from operating activities 40 912 41 920 19 527

Paid interest and other financing expenses 2 593 2 755 2 092

Received interest and other financing income -50 -201 -7

Acquisition of tangible assets and intangible assets -10 875 -12 417 -5 691

Free cash flow 32 579 32 057 15 921

2020 Enento Group FINANCIAL REVIEW | 23

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FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

Formulas for key figures

EBITDA Operating profit + depreciation and amortisation.

Items affecting comparability Material items outside the ordinary course of business that concern i) M&A and integration-related expenses, ii) redundancy payments, iii) external expenses

arising from significant regulatory changes, iv) compensation paid for damages and (v) legal actions.

Adjusted EBITDA Operating margin + items affecting comparability.

Adjusted operating profit (EBIT) Operating profit excluding amortisation from fair value adjustments related to acquisitions + items affecting comparability.

Net sales from new products and services Net sales of new products and services is calculated as net sales of those products and services introduced within the past 24 months.

Free cash flow Cash flow from operating activities added by paid interests and other financing expenses, deducted by received interests and other financing income and

deducted by acquisition of tangible and intangible assets.

Cash conversion, %

Free cash flow x 100

EBITDA

Net debt Interest-bearing liabilities – cash and cash equivalents.

Net debt to adjusted EBITDA, x

Net debt

Adjusted EBITDA

Return on equity, %

Profit (loss) for the financial year

x 100

Total equity (average for the financial year)

Return on capital employed, %

Profit (loss) before taxes + financial expenses

x 100

Total assets - non-interest-bearing liabilities (average for the financial year)

Gearing, %

Interest-bearing liabilities – cash and cash equivalents

x 100

Total equity

Equity ratio, %

Profit for the period attributable to the owners of the parent company divided by weighted average number of shares in issue taken into consideration the

possible impact of the Group’s management’s long-term incentive plan

x 100

Total assets – advances received

Dividend / earnings, %

Dividend per share

x 100

Earnings per share

Effective dividend yield, %

Dividend per share

x 100

Market value per share on the last day of the financial year

Price / Earnings

Market value per share on the last day of the financial year

Earnings per share

Earnings per share, basic Profit for the period attributable to the owners of the parent company divided by the weighted average number of shares in issue.

Earnings per share, diluted Profit for the period attributable to the owners of the parent company divided by the weighted average number of shares in issue, taking into consideration the

possible impact of the Group’s management’s long-term incentive plan.

Earnings per share, comparable Profit for the period attributable to the owners of the parent company excluding amortisation from fair value adjustments related to acquisitions and their tax

impact, divided by the weighted average number of shares in issue.

Gross investments Gross investments are fixed asset acquisitions with long-term effect, from which no sales of property or disposal of business have been deducted. As a general

rule, fixed assets comprise property, plant and equipment and intangible assets.

2020 Enento Group FINANCIAL REVIEW | 24

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GOVERNANCE STATEMENT

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CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

EUR thousand

Note 1.1.–31.12.2020 1.1.–31.12.2019

Net sales 6 151 317 145 957

Other operating income 7 649 293

Materials and services 8 -25 442 -24 499

Personnel expenses 9 -36 815 -38 574

Work performed by the entity and capitalised 2 732 2 218

Total personnel expenses -34 083 -36 356

Other operating expenses 10 -43 314 -37 111

Depreciation and amortisation 11 -21 311 -20 503

Operating profit 27 816 27 782

Finance income 12 271 154

Finance expenses 12 -2 998 -3 029

Finance income and expenses -2 728 -2 875

Profit before income tax 25 088 24 906

Income tax expense 13 -5 640 -5 197

Profit for the financial year 19 448 19 710

Consolidated Statement of Comprehensive Income

Financial Statements

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 25

Note 1.1.–31.12.2020 1.1.–31.12.2019

Items that may be reclassified to profit or loss:

Translation differences on foreign units 9 878 -5 305

Hedging of net investments made in foreign units -2 603 1 186

Income tax relating to these items 521 -237

7 795 -4 357

Items that will not be reclassified to profit or loss

Remeasurements of post-employment benefit obligations 22 -292 -3 634

Income tax relating to these items 60 749

-232 -2 885

Other comprehensive income for the financial year, net of tax 7 564 -7 242

Total comprehensive income for the financial year 27 012 12 467

Profit attributable to:

Owners of the parent company 19 448 19 710

Total comprehensive income attributable to:

Owners of the parent company 27 012 12 467

Earnings per share attributable to the owners of the parent during the financial year:

Basic, EUR 14 0,81 0,82

Diluted, EUR 14 0,81 0,82

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FINANCIAL STATEMENTS

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BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 26

Consolidated Statement of Financial Position

EUR thousand

Note 31.12.2020 31.12.2019

ASSETS

Non-current assets

Goodwill 15 358 233 351 368

Other intangible assets 15 132 972 135 460

Property, plant and equipment 16 2 084 2 356

Right-of-use assets 16 7 489 9 591

Deferred tax assets 24 486 740

Financial assets and other receivables 17 76 86

Total non-current assets 501 339 499 601

Current assets

Account and other receivables 18 25 030 23 328

Cash and cash equivalents 20 26 164 20 361

Total current assets 51 194 43 688

Total assets 552 533 543 289

EUR thousand

Note 31.12.2020 31.12.2019

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Share capital 21 80 80

Invested unrestricted equity reserve 21 317 367 340 173

Translation differences 8 202 407

Accumulated losses 21 -10 575 -29 985

Equity attributable to owners of the parent 315 073 310 675

Share of equity held by non-controlling interest 0 0

Total equity 315 073 310 675

Liabilities

Non-current liabilities

Financial liabilities 23 166 960 166 225

Pension liabilities 22 8 465 7 915

Deferred tax liabilities 24 23 213 24 137

Total non-current liabilities 198 638 198 277

Current liabilities

Financial liabilities 2 458 2 276

Advances received 25 12 075 10 247

Account and other payables 25 24 289 21 814

Total current liabilities 38 822 34 337

Total liabilities 237 459 232 614

Total equity and liabilities 552 533 543 289

CORPORATE

GOVERNANCE STATEMENT

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CONSOLIDATED

FINANCIAL STATEMENTS

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BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 27

Consolidated Statement of Changes in Equity

Attributable to owners of the parent

EUR thousand

capital

Invested

unrestricted

equity reserve

Translation

differences

Accumulated

losses Total

Share of equity held

by non-controlling

interests

Total

equity

Equity at 1.1.2020 80 340 173 407 -29 985 310 675 0 310 675

Profit for the period - - - 19 448 19 448 - 19 448

Other comprehensive income for the period

Hedging of net investments - - -2 082 - -2 082 - -2 082

Defined benefit plans - - - -232 -232 - -232

Translation differences - - 9 878 - 9 878 - 9 878

Total comprehensive income for the period - - 7 795 19 216 27 012 - 27 012

Transactions with owners

Distribution of funds - -22 807 - - -22 807 - -22 807

Management’s incentive plan - - - 193 193 - 193

Equity at 31.12.2020 80 317 367 8 202 -10 575 315 073 0 315 073

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2020 Enento Group FINANCIAL REVIEW | 28

Attributable to owners of the parent

EUR thousand

capital

Invested

unrestricted

equity reserve

Translation

differences

Accumulated

losses Total

Share of equity held

by non-controlling

interests

Total

equity

Equity at 1.1.2019 80 351 690 4 592 -35 071 321 290 0 321 290

Profit for the period - - - 19 710 19 710 - 19 710

Other comprehensive income for the period

Hedging of net investments - - 1 120 -172 948 - 948

Defined benefit plans - - - -2 885 -2 885 - -2 885

Translation differences - - -5 305 - -5 305 - -5 305

Total comprehensive income for the period - - -4 185 16 653 12 467 - 12 467

Transactions with owners

Distribution of funds - -11 517 - -11 277 -22 794 - -22 794

Management’s incentive plan - - - -289 -289 - -289

Equity at 31.12.2019 80 340 173 407 -29 985 310 675 0 310 675

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BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 29

Consolidated Statement of Cash Flows

EUR thousand

Note 1.1.–31.12.2020 1.1.–31.12.2019

Cash flow from operating activities

Profit before income tax 25 088 24 906

Adjustments:

Depreciation and amortisation 11 21 311 20 503

Finance income and expenses 12 2 728 2 875

Profit (-) / loss (+) on disposal of property,

plant and equipment

-149 -66

Management’s incentive plan 27 -29 -289

Other adjustments -206 -177

Cash flows before change in working capital 48 743 47 752

Change in working capital:

Increase (-) / decrease (+) in account and

other receivables

-1 108 -618

Increase (+) / decrease (-) in account and

other payables

1 544 2 191

Change in working capital 436 1 573

Interest expenses paid 12 -2 593 -2 755

Interest income received 12 50 201

Income taxes paid 13 -5 725 -4 852

Cash flow from operating activities 40 912 41 920

EUR thousand

Note 1.1.–31.12.2020 1.1.–31.12.2019

Cash flows from investing activities

Purchases of property, plant and equipment 16 -948 -779

Purchases of intangible assets 15 -9 928 -11 638

Purchases of subsidiaries, net of

cash acquired

- -7 327

Proceeds from sale of property, plant and

equipment

621 370

Cash flows from investing activities -10 254 -19 374

Cash flows from financing activities

Proceeds from interest-bearing liabilities 23 - -

Repayments of interest-bearing liabilities 23 -2 127 -12 216

Dividends paid and other profit distribution 21 -22 807 -22 794

Cash flows from financing activities -24 934 -35 010

Net increase/decrease in cash and cash

equivalents

5 724 -12 464

Cash and cash equivalents at beginning of

the financial year

20 361 33 215

Net change in cash and cash equivalents 5 724 -12 464

Translation differences of cash and cash

equivalents

79 -390

Cash and cash equivalents at end of the

financial year

26 164 20 361

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BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 30

Notes to the Consolidated Financial Statements

1 General information

Enento Group Plc (“the Company”) is a Finnish public limited liability company

and the parent company to Enento Group (“Enento Group” or “the Group”). The

registered address of Enento Group Plc is Hermannin rantatie 6, PO BOX 16, 00581

Helsinki, Finland.

Enento Group is one of the leading Nordic providers of business and con-

sumer information services. The Group operates in the business and consum-

er information services, collateral valuation, real estate information, sales and

marketing information as well as consumer credit information markets in Fin-

land, Sweden, Norway and Denmark. The Group’s products and services are

primarily used for risk management, finance and administration, decision-mak-

ing, sales and marketing, automation, compliance, real estate transactions and

real estate financing as well as personal financial management. The Group’s

largest clients include financial institutions and other financial service provid-

ers, expert service companies, insurance companies as well as wholesale and

retail companies. The Group’s customer base includes corporations as well as

private individuals.

Enento Group has a scalable business model that makes it possible to in-

crease net sales at minor additional cost. A large proportion of the Group’s in-

come is based on automated processes and the automatic sharing of informa-

tion from the Group’s own databases. The Group can use and relay the same

data multiple times and include it in a number of services provided for different

customers. The Group also earns income from advertising, particularly in Sweden.

Enento Group has comprehensive databases consisting of information

gathered from the authorities and other public sources as well as privately

acquired information. The databases are the basis for the Group’s product and

service offering and the development of new products and services.

Copies of the consolidated financial statements are available at the Com

pany’s head office at Hermannin rantatie 6, 00580 Helsinki and on the Group’s

website www.enento.com.

The Board of Directors of Enento Group Plc has approved these consolidat-

ed financial statements for publication on 12 February 2021. Under the Finnish

Limited Liability Companies Act, shareholders can approve or reject the con-

solidated financial statements in the Annual General Meeting held after the

release. The Annual General Meeting is also entitled to amend the consolidated

financial statements.

2 Summary of significant accounting policies

2.1 Basis of preparation

The consolidated financial statements of Enento Group have been prepared in

accordance with International Financial Reporting Standards (IFRS) as adopted

by the European Union, conforming with the IAS standards and IFRS standards as

well as SIC and IFRIC interpretations applicable as per 31 December 2020. IFRS

refer to the standards and interpretations applicable by corporations set out by

the Finnish accounting ordinance and other guidance set out on the basis of this

ordinance enforced for application in accordance with the procedure stipulat-

ed in the regulation (EC) No 1606/2002 of the European Parliament and of the

Council. The notes to the consolidated financial statements also comply with the

Finnish accounting and corporate legislation complementing the IFRS standards.

The consolidated financial statements have been prepared primarily under

the historical cost convention unless otherwise indicated. The preparation of

financial statements in conformity with IFRS requires the use of certain critical

accounting estimates. It also requires management to exercise its judgement

in the process of applying the Group’s accounting policies. The areas involving

a higher degree of judgement or complexity, or areas where assumptions and

estimates are significant to the consolidated financial statements are disclosed

in note 3.

Items included in the financial statements of each of the Group’s entities are

measured using the currency of the primary economic environment in which the

CORPORATE

GOVERNANCE STATEMENT

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entity operates. The consolidated financial statements are presented in euros,

which is Enento Group’s functional and presentation currency.

The amounts are presented in thousands of euros unless otherwise stated.

Amounts presented in the consolidated financial statements are rounded, so

the sum of individual figures may differ from the sum reported.

2.1.1 New Standards and Interpretations Adopted in 2020

Enento Group did not adopt any new standards during the financial year 1 Jan-

uary–31 December 2020. The Group has assessed the amended standards and

interpretations that entered into effect in 2020. The amended standards and

interpretations did not have a material impact on the financial statements.

2.1.2 New standards and interpretations not yet adopted

Enento Group has not yet applied the following new and amended standard that

has already been published. The Group will adopt it on the effective date or, if

the date is other than the first day of the financial year, from the beginning of the

subsequent financial year.

The objective of IFRS 17 Insurance Contracts is to improve the quality of the

reporting of financial position and profitability of insurance companies and

harmonise the valuation and reporting of insurance contracts falling under the

standard. The new standard replaces IFRS 4 standard published in 2004. The

standard’s entry into effect was postponed by two years and it will be applied in

financial years starting on or after 1 January 2023. The application of the stand-

ard will not have an impact on the Group’s future financial statements.

Enento Group estimates that the IFRIC interpretations that have already been

published but are not yet in effect will not have a material impact on the Group.

2.2 Consolidation

Subsidiaries

Subsidiaries are all such entities over which Enento Group has control. Enento

Group controls an entity when it is exposed to, or has rights to, variable returns

from its involvement with the entity and has the ability to affect those returns

through its power over the entity. Subsidiaries are fully consolidated from the date

on which the control is transferred to Enento Group. They are deconsolidated from

the date that the control ceases.

Inter-company transactions, receivables and liabilities as well as unrealised

gains and losses on transactions between group companies are eliminated.

When needed, the financial statements by subsidiaries have been adjusted to

conform to the Group’s accounting policies.

Acquired businesses

Acquired subsidiaries have been consolidated into the Group’s accounts from the

date which the Group has acquired the control and correspondingly the divest-

ed functions are included until the termination of control. The mutual owning of

shares of the group companies is eliminated by acquisition method. The surren-

dered consideration, including the conditional acquisition price and the identifia-

ble assets and liabilities are valued to the fair value at the moment of acquisition.

Purchase related expenses are recognised as an expense.

Further information for business combinations of Enento Group is disclosed

under 2.4 Goodwill and intangible assets and 5 Acquired businesses.

2.3 Segment reporting

The Group constitutes a single operating segment, which is consistent with the

way internal reporting is provided to the chief operating decision-maker and the

way chief operating decision-maker determines allocation of resources and as-

sessment of performance.

The CEO has been determined as the chief operating decision-maker. The

CEO is responsible for resource allocation, evaluating the Group’s result as well

as strategic and operational decision-making.

2.4 Goodwill and intangible assets

Intangible assets comprise goodwill and other intangible assets. Other intan

gible assets consist primarily of capitalised development costs related to new

products and services as well as IT systems, off the shelf software and intangi-

ble assets recognised separately from goodwill in connection with the company

acquisitions.

Goodwill

Goodwill recorded at the consolidated financial statements of the Group arose

from the acquisition of Asiakastieto Group business by the Group in 2008, pur-

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The assets’ residual values and useful lives and amortisation method are reviewed

at minimum at the end of each reporting period and adjusted, if appropriate, to

reflect changes in the expected economic benefits. The amortisation of intangible

assets is commenced when the asset is ready for its intended use.

Assets that are subject to amortisation are reviewed for impairment whenev-

er events or changes in circumstances indicate that the carrying amount may

not be recoverable. An impairment loss is recognised for the amount by which

the asset’s carrying amount exceeds its recoverable amount. The recoverable

amount is the higher of an asset’s fair value less costs of disposal and value in

use. For the purpose of impairment testing, assets are allocated to the Group’s

cash-generating units. Prior impairments of tangible and intangible assets (other

than goodwill) are reviewed for possible reversal at each reporting date.

Capitalised development and software costs

Costs associated with maintaining current products and services are recognised

as an expense as incurred. Development costs of new products and services that

are directly attributable to building and testing of new products and services

controlled by Enento Group are recognised as intangible assets when the follow-

ing criteria are met:

• it is technically feasible to complete the new product and service so that it will

be available for use;

• the management intends to complete the new product and service and use

or sell it;

• there is an ability to use or sell the new product and service;

• it can be demonstrated how the new product and service will generate

probable future economic benefits;

• adequate technical, financial and other resources to complete the

development and to use or sell the new product and service are available; and

• the expenditure attributable to the new product and service during its

development can be reliably measured.

Directly attributable costs that are capitalised as part of the product include the

software development employee costs and an appropriate portion of relevant

overheads. The capitalised costs are presented in the consolidated income state-

ment under “Work performed by the entity and capitalised”. Other development

chase of share capital of Intellia Oy in 2016, the purchase of share capital of Email-

eri Oy in 2017, the purchase of share capital of UC AB in 2018 and the purchase

of share capital of the Proff companies and the Solidinfo.SE business in 2019. For

internal monitoring and impairment testing purposes, goodwill is monitored at

the Group’s cash-generating unit level. The Group has three cash-generating

units: Finland, Sweden, and Norway and Denmark. This also reflects the way the

acquirer expected to realise the benefits of the acquisition.

Goodwill impairment test is undertaken annually or more frequently if events

or changes in circumstances indicate a potential impairment. The carrying val-

ue of the cash generating unit is compared to the recoverable amount, which

is the higher of the value in use and the fair value less costs of disposal of the

related cash generating unit.

Other intangible assets

Other intangible assets are initially recognised on the balance sheet at historical

cost if the cost can be measured reliably and it is probable that future economic

benefits associated with the asset will flow to Enento Group.

Other intangible assets acquired in connection with company acquisitions

are recognised separate from goodwill if they meet a definition of intangible

asset and are separable or are based on agreements or legal rights. Intangi-

ble assets recognised in connection with acquisitions consist of, among other

things, the value of customer agreements and related customer relations, the

value of acquired IT systems, databases and technology as well as the value

of trademarks. The value of customer agreements and customer relations is

defined by the assumed length of customer relationship and on the basis of

cash flows assessed.

Amortisations are calculated along straight-line method over their useful

economic lives. The applied useful economic lives are:

Capitalised development costs ................................................................................ 5–10 years

Off the shelf software ........................................................................................................3–5 years

Customer and contract database .......................................................................... 3–20 years

IT systems, databases and technology ................................................................. 3–12 years

Trademarks ........................................................................................................................... 5–15 years

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expenditures that do not meet these criteria are recognised as an expense as

incurred. Development costs previously recognised as an expense are not rec-

ognised as an asset in a subsequent period. New service development costs rec-

ognised as assets are amortised over their estimated useful lives, which does not

exceed 10 years.

2.5 Property, plant and equipment

Tangible right-of-use assets

Property, plant and equipment comprise machinery and equipment, other tangi-

ble assets and advances paid.

Machinery and equipment comprise mainly IT, office machines and equip-

ment as well as company cars. Machinery and equipment is stated at historical

cost less accumulated depreciation. Historical cost includes expenditure that is

directly attributable to the acquisition of the items.

Other tangible assets comprise mainly capitalised modernisation and reno-

vation expenses of office premises. Other tangible assets are stated at histor-

ical cost less depreciation. Historical cost includes expenditure that is directly

attributable to the acquisition of the items.

Depreciation on tangible assets is calculated using the straight-line meth

od to allocate their cost amounts to their residual values over their estimated

useful lives, as follows:

Machinery and equipment ...........................................................................................3–10 years

Capitalised modernisation and renovation expenses of office premises ... 10 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropri-

ate, at the end of each reporting period. An asset’s carrying amount is written down

immediately to its recoverable amount if the asset’s carrying amount is greater than

its estimated recoverable amount. Gains and losses on disposals are determined

by comparing the proceeds with the carrying amount and are recognised within

‘Other operating income” or ”Other operating expenses” in the income statement.

2.6 Financial assets

According to IFRS 9 standard financial assets have been classified either to fi-

nancial assets measured at amortised cost or financial assets measured at fair

value through profit or loss. The classification of financial assets is driven by the

contractual cash flow characteristics and by the entity’s business model used for

managing the financial assets.

Financial assets at amortised cost

The Group classifies its financial assets as measured at amortised cost only if both

of the following criteria are met:

• the asset is held within a business model the objective of which is to collect

the contractual cash flows, and

• the contractual terms give rise to cash flows that are solely payments of

principal and interest.

This group includes Enento Group’s accounts receivable, other financial assets

and cash and cash equivalents. These financial assets are included in current

assets, expect for maturities greater than 12 months after the end of the reporting

period, in which case they are classified as non-current assets.

Expected credit losses related to financial assets measured at amortised

cost are calculated on the basis of the expected credit loss model pursuant to

IFRS 9. The Group’s credit losses may originate mainly from accounts receivable

and contract assets. Accounting policies concerning these impairments is de-

scribed in section 2.7 Accounts receivable.

Financial assets measured at fair value through profit or loss

In this category, the Group recognises derivatives not designated for hedge ac-

counting and investments in unlisted securities.

Changes in the fair value of derivatives are recognised in other operating

income, other operating expenses, financial income or financial expenses de-

pending on the purpose of the derivatives. As Enento Group’s currency deriv-

ative in effect on the reporting date hedges a probable monetary item, the

change in the fair value of the related derivative is recognised in financial in-

come or expenses.

Derivatives measured at fair value through profit or loss are presented as cur-

rent assets if they mature within 12 months from the end of the reporting period.

Derivatives with a maturity exceeding 12 months are included in non-current

assets.

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Investments in unlisted securities are included in non-current assets unless

they mature, or the management intends to dispose of them, within 12 months

from the end of the reporting period, in which case they are classified as cur

rent assets.

2.7 Accounts receivable

Accounts receivable are amounts due from customers for goods sold or services

performed in the ordinary course of business. These receivables are usually due

within 14 to 30 days. If collection is expected in one year or less, they are classi-

fied as current assets. If not, they are presented as non-current assets. Accounts

receivable are recognised initially at the amount of consideration that is uncon-

ditional unless they contain significant financing components, in which case they

are recognised at fair value.

The Group applies the simplified impairment model for accounts receivable

and contract assets, according to which the Group recognises expected credit

losses since the initial recognition of the receivable for the whole amount of ex

pected credit losses during the receivables’ lifetime. To measure the expected

credit losses, account receivables and contract assets have been grouped on

the basis of shared credit risk characteristics and the days past due. The con-

tract assets relate to unbilled work in progress and have substantially the same

risk characteristics as the accounts receivable for the same types of contracts.

The Group has therefore concluded that the expected loss rates for trade receiv-

ables are a reasonable approximation of the loss rates for the contract assets.

The expected loss rates are based on the payment profiles of sales over

a period of 24 months before 31 December 2019 and 1 January 2019 and the

corresponding historical credit losses experienced within this period. The histor-

ical loss rates are adjusted to reflect current and forward-looking information

on macroeconomic factors affecting the ability of the customers to settle the

receivables. The amount of the loss-related deductible is presented in note 4

Credit risk management.

Account receivables and contract assets are derecognised when there is

no reasonable expectation of recovery. Indicators that there is no reasonable

expectation of recovery include, amongst others, potential bankruptcy of the

debtor or inability to prepare a payment plan with the Group and delay of the

contractual payments for more than a year.

2.8 Cash and cash equivalents

In the consolidated statement of cash flows and the consolidated statement

of financial position, cash and cash equivalents include cash in hand and bank

accounts with banks.

2.9 Financial liabilities

Financial liabilities at amortised cost

Financial liabilities at amortised cost are recognised initially at fair value, net of

transaction costs incurred. The liabilities are subsequently carried at amortised

cost. Any difference between the proceeds (net of transaction costs) and the re-

demption value is recognised in the income statement over the loan period using

the effective interest rate method. The Group also has unused credit facilities

and recognises the related fees in the income statement on a straight-line basis.

The Group has both non-current and current financial liabilities. Financial

liabilities can be interest-bearing or non-interest-bearing. Current financial li-

abilities include liabilities falling due within 12 months or less.

A financial liability is derecognised when the Group either discharges the

liability (or part of it) by paying the creditor or is legally released from primary

responsibility for the liability (or part of it) either by process of law or by the

creditor, in which case the difference between the financial liability’s balance

sheet value and payment is recognised in the income statement.

Financial liabilities at fair value through profit or loss

In this category, the Group recognises derivatives not designated for hedge ac-

counting.

Changes in the fair value of derivatives are recognised in other operating

income, other operating expenses, financial income or financial expenses de-

pending on the purpose of the derivatives. As Enento Group’s currency deriv-

ative in effect on the reporting date hedges a probable monetary amount,

the change in the fair value of the related derivative is recognised in financial

income or expenses.

Derivatives measured at fair value through profit or loss are presented as

current liabilities if they mature within 12 months from the end of the report

ing period. Derivatives with a maturity exceeding 12 months are included in

non-current liabilities.

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2.10 Accounts payable

Accounts payable are obligations to pay for goods or services that have been

acquired in the ordinary course of business from suppliers. Accounts payable are

classified as current liabilities if payment is due within one year or less. If not, they

are presented as non-current liabilities. Account payables are recognised initially

at fair value and subsequently measured at amortised cost.

2.11 Foreign currency translation and net investment hedge

The consolidated financial statements are presented in euros, which is the func-

tional currency of the parent company. The foreign subsidiaries’ income state-

ments and cash flows have been converted into euro on a monthly basis using

the monthly average exchange rate issued by the European Central Bank, and

the balance sheet has been converted using the exchange rate issued by the

European Central Bank on the end date of the financial year. Conversion of the

profit for the financial year using different exchange rates for the income state-

ment and balance sheet causes a translation difference in the balance sheet

recognised in equity.

Foreign currency transactions are translated into the functional currency

using the exchange rates at the dates of the transactions. Foreign exchange

gains and losses resulting from the settlement of such transactions and from

the translation of monetary assets and liabilities denominated in foreign cur-

rencies at year-end exchange rates are generally recognised in profit or loss

unless they are not allocated as net investment hedge. In such a case, the

exchange rate differences are recognised in other comprehensive income and

accumulated into translation differences in equity.

Foreign exchange gains and losses related to cash and cash equivalents,

borrowings and interests related to borrowings are presented under finance

income and finance cost in the statement of profit or loss. All other foreign ex-

change gains and losses are presented in the statement of profit or loss on a

net basis within other operating income or operating expenses.

The results and financial position of foreign operations that have a func-

tional currency different from the presentation currency are translated into the

presentation currency as follows:

• assets and liabilities for each balance sheet presented are translated at the

closing rate at the date of that balance sheet;

• income and expenses for each statement of profit or loss and statement of

comprehensive income are translated at average exchange rates (unless

this is not a reasonable approximation of the cumulative effect of the rates

prevailing on the transaction dates, in which case income and expenses are

translated at the dates of the transactions); and

• all resulting exchange differences are recognised in other comprehensive

income.

On consolidation, exchange differences arising from the translation of any net

investment in foreign entities, and of borrowings designated as hedges of such

investments, are recognised in other comprehensive income. When a foreign op-

eration is disposed of, the associated exchange differences, including the effec-

tive portion of the hedge, are reclassified to profit or loss as part of the gain or

loss on sale. Goodwill and fair value adjustments arising from the acquisition of a

foreign operation are treated as assets and liabilities of the foreign operation and

translated at the closing rate.

At the inception of a hedge relationship, the Group documents the eco-

nomic relationship between hedging instruments and hedged items including

whether changes in the cash flows of the hedging instruments are expected to

offset changes in the cash flows of the hedged items. The Group documents

its risk management objective and strategy for undertaking its hedge trans-

actions. For more information related to the hedging of the net investment, see

note 4 Currency risk management.

2.12 Interest income

The Group earns interest mainly from overdue interest from account receivables.

Interest income is recognised when they occur.

2.13 Share capital

Ordinary shares are classified as equity.

2.14 Current and deferred income tax

The tax expense for the period comprises current and deferred tax. Tax is recog-

nised in the income statement.

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The current income tax charge is calculated on the basis of the tax laws of the

Group’s operating countries that have been enacted or substantively enacted at

the balance sheet date. The management periodically evaluates positions taken

in tax returns with respect to situations in which applicable tax regulation is sub-

ject to interpretation. It establishes provisions where appropriate on the basis of

amounts expected to be paid to the tax authorities and assets when expected

to receive tax returns.

Deferred income tax is recognised on temporary differences arising between

the tax bases of assets and liabilities and their carrying amounts in the consol-

idated financial statements. Deferred income tax is determined using tax rates

(and laws) that have been enacted or substantively enacted by the balance

sheet date and are expected to apply when the related deferred income tax

asset is realised or the deferred income tax liability is settled.

Deferred income tax liabilities are recognised in full for all taxable tempo-

rary differences, except for deferred income tax liability, where the timing of

the reversal of the temporary difference is controlled by Enento Group and it is

probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognised only to the extent that it is probable

that future taxable profit will be available against which the temporary differ-

ences can be utilised and up to the amount of the deferred tax liabilities.

Deferred tax assets arising from past losses above the amount of deferred

tax liabilities are recognised if convincing evidence exists that the Group will be

able utilise the tax losses carried forward.

Deferred income tax assets and liabilities are offset when there is a legal-

ly enforceable right to offset current tax assets against current tax liabilities

and when the deferred income tax assets and liabilities relate to income taxes

levied by the same taxation authority on either the same taxable entity or

different taxable entities where there is an intention to settle the balances on

a net basis.

2.15 Employee benefits

Short-term employee benefit obligations

Short-term employee benefits consist of salaries including fringe benefits and

vacation pay payable within 12 months. Short-term employee benefits are rec-

ognised as other liabilities in respect of employee service up to the reporting

date and measured at the amounts expected to be paid when the liabilities are

settled. A liability is recognised for the amount expected to be paid under the

short-term bonus plan if the criteria for paying such bonuses are met.

Post-employment obligations

The Group operates both defined benefit and defined contribution pension plans.

For defined contribution plans, the Group pays contributions to publicly or

privately administered pension insurance plans on a mandatory, contractual

or voluntary basis. Enento Group has no further payment obligations once the

contributions have been paid. The contributions are recognised as employee

benefit expense when they are due. Prepaid contributions are recognised as

an asset to the extent that a cash refund or a reduction in the future payments

is available.

The Group has a partially funded defined benefit plan in Sweden (BTP 2)

that is administered by SPP Konsult AB. The liability or asset recognised on the

balance sheet in respect of defined benefit pension plans is the present value

of the defined benefit obligation at the end of the reporting period less the fair

value of plan assets. The defined benefit obligation is calculated annually by

independent actuaries using the projected unit credit method.

The present value of the defined benefit obligation is determined by dis-

counting the estimated future cash outflows using interest rates of high-quality

corporate bonds that are denominated in the currency in which the benefits will

be paid, and that have terms approximating the terms of the related obliga-

tion. The Group has derived its interest rate from the Swedish market of covered

mortgage bonds, with an extrapolated duration corresponding to the Group’s

post-employment obligations. The fair value of any plan assets is remeasured

on the reporting date.

Service cost is recognised as part of personnel expenses and net interest

expenses are presented as part of finance costs. The net interest cost is calcu-

lated by applying the discount rate to the net balance of the defined benefit

obligation and the fair value of plan assets.

Remeasurement gains and losses arising from experience-based adjustments

and changes in actuarial assumptions are recognised in the period in which

they occur, directly in other comprehensive income. They are included in retained

earnings in the statement of changes in equity and on the balance sheet.

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Changes in the present value of the defined benefit obligation resulting from

plan amendments, curtailments and the fulfilment of obligations are recog-

nised immediately in profit or loss as past service costs.

The Swedish special salary taxes on pension costs (SLP) constitute part of

the actuarial assumptions and are therefore recognised as part of the net pen-

sion defined benefit liability.

Swedish tax on returns from pension funds is recognised on an ongoing ba

sis in profit or loss for the period to which the tax relates and is therefore not

included in the calculation of post-employment obligations. The tax relates to

a hypothetical return on plan assets determined for tax purposes only and is

recognised in other comprehensive income. In the case of unfunded or partially

unfunded plans, the tax is included in the profit or loss for the year.

Termination benefits

Termination benefits are payable when employment is terminated by the Group

before the normal retirement date or when an employee accepts voluntary re-

dundancy in exchange for these benefits. The Group recognises termination

benefits at the earlier of the following dates: (a) when the Group can no longer

withdraw the offer of those benefits; and (b) when the Group recognises costs for

restructuring that is within the scope of IAS 37 and involves the payment of termi-

nation benefits. In the case of an offer made to encourage voluntary redundancy,

the termination benefits are measured on the basis of the number of employees

expected to accept the offer. Benefits falling due more than 12 months after the

end of the reporting period are discounted to present value.

2.16 Provisions

Provisions for restructuring expenses and legal claims are recognised when the

Group has a present legal or constructive obligation as a result of past events, it

is probable that an outflow of resources will be required to settle the obligation

and the amount has been reliably estimated. Restructuring provisions include

termination benefits related to personnel. Provisions are not recognised for future

operating losses.

Where there are a number of similar obligations, the likelihood that an out-

flow will be required in settlement is determined by considering the class of

obligations as a whole. A provision is recognised even if the likelihood of an

outflow with respect to any one item included in the same class of obligations

may be small.

Provisions are measured at the present value of the management’s best

estimate of the expenditure required to settle the present obligation at the end

of the reporting period. The discount rate used to determine the present value

is a pre-tax rate that reflects current market assessments of the time value of

money and the risks specific to the liability. The increase in provisions due to the

passage of time is recognised as an interest expense.

2.17 Share-based payments

The Group has share-based incentive plans which include incentives paid as

shares as well as cash components related to the withholding tax obligations

associated with the share incentives. The benefits granted in accordance with the

incentive plan are measured at fair value on the grant date and expensed on a

straight-line basis over the vesting period.

The fair value of the equity-settled incentives is the market value on the

grant date. The share-based payments settled with equity instruments are not

remeasured subsequently, and cost from these arrangements is recognised as

an increase in equity. Compensation costs are recognised for such payments

based on the entire scheme being an equity-settled payment. Compensation

costs are recognised on the basis of the number of gross shares awarded, in

spite of the employee ultimately only receiving the net shares and the Group

paying the portion required to meet the withholding obligations to the tax

authority in cash. The withholding tax paid by the Group to the tax authority

is recognised directly from equity. The cash-settled share-based incentives

are measured at fair value at the end of each financial reporting period until

the settlement date and recognised as a liability. The expensed amount of

the benefits is based on the Group’s estimate of the amount of benefits to

be paid at the end of the vesting period. Market conditions and non-vesting

conditions are considered in determining the fair value of the benefit. Instead,

the non-market criteria, such as profitability or increase in sales, are not con

sidered in measuring the fair value of the benefit but taken into account when

estimating the final amount of benefits. The Group updates the estimate of the

final amount of the benefits at every financial reporting date and recognises

changes in estimates through the statement of profit or loss.

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the service package, if any, are separate performance obligations. If a customer

orders additional reports or information, the promises in additional orders are dis-

tinct performance obligations with stand-alone selling prices and are recognised

as revenue as separate contracts.

Enento Group also provides customer-specific projects. The scope of work is

defined on a contract-by-contract basis. These contracts may include several

deliverables such as different types of formulas to calculate the credit rating of

private customers for consumer credit or mortgage loans. Each of the deliver-

ables is a distinct performance obligation. Contracts for customer projects are

analysed separately to conclude whether revenue is recognised over time or

at a point in time due to customised contract terms. Projects may include sub-

sequent services linked to the formula, such as input data for the formulas or

support services. Revenue from services provided after the customer project –

i.e. support and maintenance services for the formulas created in the customer

project – is recognised over time.

The Group’s management has exercised judgement with regard to online ser-

vices contracts that include a fixed access fee that do not transfer a promised

good or service to the customer. These fixed access fees are advance payments

for online services (transactions) and should be recognised on the basis of the sat-

isfaction of the underlying performance obligation, i.e. allocated to each piece of

delivered information. Instead, these fixed fees have been recognised as revenue

in a linear fashion over the term of the contract for the sake of clarity. As the volume

of delivered online services (transactions) under these contracts does not vary sig-

nificantly during the year, the recognition of revenue over time has been judged to

be reasonable by the management.

Customer Data Management:

Customer management services help sales and marketing professionals improve

the efficiency of their work and boost customer management by providing tar

get group tools, services for surveying potential customers, register updates and

maintenance, as well as various target group extractions.

Performance obligations related to Customer Data Management services are

each of the services provided, e.g. a service for receiving alerts about changed

information concerning selected entities or a service that enables the customer

to perform searches of entities based on selected criteria, such as location or line

2.18 Revenue recognition

Enento Group provides information services. The majority of revenue is transac-

tion-based, generated from the delivery of individual pieces or bundles of credit,

business and market information. The information is collected by the Group from

several data sources, e.g. its customers, trade registers, population registers and

real estate registers, processed or refined by the Group and made available to

the customers mainly through online services.

The major sales transactions are derived from the following business areas

and performance obligations:

Risk Decisions:

Companies engaging in corporate and consumer business use decision services

and solutions for general risk management, credit risk management, financial

management, customer acquisition, decision-making, fraud and credit loss pre-

vention as well as for gaining knowledge of and identifying their customers. The

Risk Decisions revenue stream includes three main types of performance obliga-

tions: online services (transactions), customised service packages for online ser-

vices and customer projects.

Online services (transactions) are information services typically delivered as

reports, bundles of information or individual pieces of information when, and if, the

customer places an order. Order and delivery are usually performed simultane-

ously. Regardless of the physical form of a report that Enento Group delivers to a

customer, Enento Group considers that the nature of its performance is a service

as a report consists of information that is valid only at the time it is extracted/is-

sued. Revenue is recognised at the point in time when the performance obligation

is satisfied by the delivery of information.

Customised service packages include, in practice, an unlimited number of

transactions of predetermined information services for the contract period deliv-

ered to the customer whenever needed. The services in the customised packages

are substantially the same and have the same pattern of transfer to the customer.

The agreements include fixed charges, i.e. minimum charges irrespective of the

customer’s actual use of the enquiry-based services. Enento Group has conclud-

ed that it provides a series of distinct services (i.e. stand ready to deliver). There-

fore, a customised service package contract includes one performance obligation

that is recognised as revenue over time on a straight-line basis. Orders outside

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of business. Revenue from these services is recognised over time on a straight-line

basis. If a customer orders additional reports or information, the commitments

associated with the additional orders are distinct performance obligations with

stand-alone selling prices and are recognised as Customer Data Management

revenue as separate contracts.

Digital Processes:

Services in this business area include, among others, real estate and apartment

information, information about buildings and their valuation as well as solutions

that help customers automate their collateral management processes and dig-

italise the administration of housing purchases. The services of the business area

are also used for compliance purposes, such as to identify companies’ beneficial

owners and politically exposed persons. The Digital Processes revenue stream

includes two main types of performance obligations, which are online services

(transactions) and service packages.

Online services (transactions) are information services typically delivered as

reports, bundles of information or individual pieces of information when, and if, the

customer places an order. Order and delivery are usually performed simultane-

ously. Regardless of the physical form of the report that Enento Group delivers to a

customer, Enento Group considers that the nature of its performance is a service,

as a report consists of information that is valid only at the time it is extracted/is-

sued. Revenue is recognised at the point in time when the performance obligation

is satisfied by the delivery of information.

For service packages, each of the services provided is a performance obliga-

tion, e.g. a drafting service, property valuation service or digitalised residential sale

process, which are available to customers on a when-and-if-needed basis. The

drafting service provides tools for using the public authorities’ e-services effectively,

such as contract templates. The digitalised residential sale process enables banks

and realtors to communicate through a portal and collect all the information that

is exchanged between banks and realtors throughout the purchase and sale pro-

cess. Revenue from these services is recognised over time on a straight-line basis.

SME and Consumers:

This area consists of digital services for small and micro companies with easy-to-

use applications and user interfaces for the evaluation of risks and sales potential,

acquisition of other relevant information on customers and business partners and

proof of own creditworthiness. Services for consumers help consumers understand

and better manage their finances while simultaneously protecting them from

identity theft and fraud. The revenue streams of SME and Consumers consist of

two main types of performance obligations.

The performance obligation is the deliverable provided, e.g. analysis of an en-

tity’s credit rating or a certificate of an entity’s payment behaviour, each of which

is a distinct performance obligation. Revenue is recognised when control transfers

to the customer at the point in time when the ordered certificate or analysis is

delivered to the customer.

Standardised service packages for online services include an unlimited num-

ber of predetermined information services provided whenever needed during the

contract period. The services in the standardised packages are substantially the

same and have the same pattern of transfer to the customer. Enento Group has

determined that it provides a series of distinct services (i.e. stand ready to deliver)

which are accounted for as one performance obligation. Revenue from stand-

ardised service packages is recognised over time on a straight-line-basis. Orders

outside the service package, if any, are separate performance obligations and

recognised as revenue at the point in time when the service is performed and

delivered to the customer.

Private services include primarily ID security and blocking services that notify

customers immediately if their credit information is queried or changed. These

services are delivered continuously over time and recognised as revenue over

time on a straight-line basis.

Enento Group provides advertising services by providing advertisement space

on its websites. The performance obligation is to publish the advertisement on the

Group’s webpages during the contract period and the revenue is recognised over

time on a straight-line basis during the advertisement period.

Enento Group sells corporate and governmental reports with market industry

information and regional reports published for periods of three or four months.

The revenue is invoiced and recognised at the point in time of publication and

delivery of each report.

Enento Group recognises as revenue the transaction price to which Enento

Group expects to be entitled in exchange for transferring goods and services

to the customer. Amounts collected on behalf of third parties, e.g. value added

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taxes, are excluded. Some of the Group’s contracts include service level agree-

ments (SLA) that include penalties to be paid if the provided services are not in

accordance with the agreed service level. As penalties have not been realised

in the past, the management has concluded that even though the contracts

include a variable consideration, it is highly unlikely that a significant reversal

of revenue will occur in the future. Therefore, penalties have not been deducted

from the transaction price. Telephone sales to small and micro companies have

resulted in reversals of revenue in the past. The time between the issue of in-

voice and the issue of credit note is on average two months. Based on historical

data, and in the absence of indicators that future reversal rate should change,

the Group has adjusted transaction prices for the last two months’ telephone

sales. The accrued effect on revenue in the financial statements for the year

2020 is EUR -46 thousand (EUR 30 thousand).

Private customers and entities ordering one-off analyses and certificates

through the Group’s online services are typically charged directly through the

customers’ credit cards on the website when the order is placed. The corre

sponding service is provided immediately or within days of the payment. The

majority of corporate customers are invoiced as services have been transferred

to the customer or on a monthly basis. Typical payment terms are 14–30 days.

The Group also provides some continuous services with a fee invoiced yearly,

twice a year, quarterly or monthly, which indicate that the transaction price in-

cludes financing component. As the Group applies the practical expedient for

significant financing components, the Group does not adjust transaction prices

for the effects of the time value of money when it expects that the period be-

tween transferring the promised good or service to a customer and the customer

paying for that good or service will be one year or less. Customer-specific pro-

jects have milestone payments but the timing differences between payments

and revenue recognition do not typically exceed one year. Due to annual fees

and milestone payments related to projects, the recognition of contract assets

or liabilities depends on the timing of invoicing. The annual fees and milestone

payments are invoiced either in advance, during the contract period or after

providing the service. A contract asset is recognised if a fee is not invoiced as

the services are provided. Contract assets are transferred to accounts receiv-

able when the underlying services have been invoiced. Contract liabilities, i.e.

advances received, are recognised if payment is received prior to providing the

underlying services. Contract liabilities are recognised as revenue when the un-

derlying services have been provided.

Principal or agent

Enento Group’s revenue is generated from the sale of credit, business and mar-

ket information that is collected by the Group from several data sources, e.g. its

customers, the trade register, the population register and the real estate regis-

ter. Most of the information is processed or refined by the Group and stored in

the Group’s databases. The management has analysed whether Enento Group

acts as a principal or as an agent related to the information sold. For the ma-

jority of the information sold to customers, the Group takes control over the

information collected, has discretion in establishing selling prices and has the

primary responsibility for the information provided. Therefore, the management

has concluded that the Group acts as a principal in most of its information

services. However, within online services in the Digital Processes business, the

Group also provides its customers with official reports derived from registers

maintained by the authorities at the customer’s request. The official reports are

forwarded as is to customers as PDF files with no data input or modification by

Enento Group and pricing is set by the authority in question. Enento Group has

concluded that it does not have control over the official reports and acts as

an agent in the arrangement and recognises revenue from the official reports

as net amounts.

Contract costs

Enento Group pays sales commissions to external and internal salespersons when

obtaining a contract. Sales commissions are capitalised as assets and amortised

on a straight line basis that is consistent with the pattern of the transfer of the

services to the client.

2.19 Lease agreements

The Group recognises an asset (a right-of-use asset for the object of the lease)

and a financial liability relating to payment of lease rents on the balance sheet

for all lease agreements in the Group unless the lease agreement duration is 12

months or less or the leased item is of low value. Starting from 1 January 2019,

right-of-use asset depreciation and interest expense relating to lease liabilities

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are recognised in the income statement instead of lease expenses. Lease ex-

penses are divided into interest expense and repayment of the lease liability

Enento Group leases office premises, IT equipment and cars. Lease agree-

ments are usually made for fixed time period ranging from one year to nine

years. Some lease agreements include options to extend the lease agreement.

These options are described further below. The lease term is the time period

during which the agreement is non-cancellable, also considering any exten

sion and termination options if it is reasonably certain that such options will be

exercised.

Lease agreements can include both lease components and non-lease com-

ponents. The Group allocates the consideration in the contract to the lease

and non-lease components based on their relevant stand-alone prices. Lease

terms are negotiated on an individual basis and contain normal and usual

terms and conditions. The lease agreements do not impose any covenants

other than the security interests in the leased assets that are held by the lessor.

Assets and liabilities arising from a lease are initially measured on a present

value basis. Right-of-use assets are measured at acquisition cost, which includes:

• the initial lease liability

• lease payments before the beginning of the agreement less any lease

incentives received

• any initial direct cost, and

• restoration costs.

The net book values of right-of-use assets at the end of the reporting period

divided into asset classes are presented in the table below:

Right-of-use assets

EUR thousand

31.12.2020 1.1.2020

Premises 7 254 9 318

Machinery and equipment 234 273

Total 7 489 9 591

Right-of-use assets recognised on lease agreements are subject to impairment

testing. The assets’ residual values and useful lives are reviewed, and adjusted if

appropriate, at the end of each reporting period. An asset’s carrying amount is

written down immediately to its recoverable amount if the asset’s carrying amount

is greater than its estimated recoverable amount.

Lease liabilities include the net present value of the following lease payments:

• fixed payments (including in-substance fixed payments) less any lease

incentives received

• variable lease components that are based on an index or a rate, initially

measured using the index or rate on the commencement date

• amounts expected to be payable by the Group under residual value

guarantees

• the exercise price of a purchase option if the Group is reasonably certain to

exercise that option, and

• penalty payments for terminating the lease, if the lease term reflects the

Group exercising that option.

Lease payments to be made under reasonably certain extension options are in-

cluded in the measurement of the liability. Value added tax is not included in the

lease liability.

Lease payments are discounted using the lessee’s incremental borrowing

rate, being the rate that the lessee would have to pay to borrow the funds nec-

essary to obtain an asset of similar value to the right-of-use asset in a similar

economic environment with similar time period, terms, security and conditions.

To determine the incremental borrowing rate, the Group:

• where possible, uses recent third-party financing received by the lessee as a

starting point, adjusted to reflect changes in financing conditions since third-

party financing was received

• uses a build-up approach that starts with a risk-free rate adjusted for credit

risk for leases held by the Group, and

• makes adjustments specific to the lease, e.g. term, country, currency and

security.

Lease payments are allocated between principal and finance cost. Finance

cost is charged to profit or loss over the lease period so as to produce a con-

stant periodic rate of interest on the remaining balance of the liability for each

period.

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Right-of-use assets are generally depreciated over the shorter of the asset’s

useful life and the lease term on a straight-line basis. If the Group is reasonably

certain to exercise a purchase option, the right-of-use asset is depreciated

over the underlying asset’s useful life. While the Group revalues its buildings that

are presented within fixed assets, it has chosen not to do so for the right-of-use

buildings held by the Group.

The difference between the acquisition cost and carrying amount of right-

of-use assets is recognised on a straight-line basis over the lease term as

depreciation as follows:

Premises .....................................................................................................................................1–9 years

Machinery and equipment ..............................................................................................1–5 years

Payments associated with short-term leases and all leases of low-value assets,

less incentives received from lessor, are recognised as expenses on a straight-

line basis over the lease term in profit or loss. Short-term leases are leases with

a lease term of 12 months or less. Low-value assets comprise IT equipment and

office furniture. Expenses recognised in profit or loss relating to short-term leases

were EUR 73 thousand (EUR 227 thousand) and expenses recognised in profit or

loss relating to low-value assets were EUR 447 thousand (EUR 748 thousand) in

the financial year 2020.

Extension and termination options are included in a number of lease agree-

ments for right-of-use assets. These are used to maximise operational flexibility

in terms of managing the assets used in the Group’s operations. The majority of

the extension and termination options held are exercisable only by the Group

and not by the respective lessor.

In determining the lease term, management considers all facts and circum

stances that create an economic incentive to exercise an extension option or not

exercise the termination option. Extension options (or periods after termination

options) are only included in the lease term if the lease is reasonably certain to

be extended (or not terminated). Most extension options in offices and machinery

and equipment leases have not been included in the lease liability because the

Group could replace the assets without significant cost or business disruption.

2.20 Government grants

Grants from the government are recognised at their fair value where there is a

reasonable assurance that the grant will be received and the Group will comply

with all attached conditions.

Government grants relating to costs are deferred and recognised in the in-

come statement over the period necessary to match them with the costs that

they are intended to compensate.

The Group has received EUR 80 thousand (EUR 0) in public subsidies to mit

igate the negative impacts of the COVID-19 epidemic. The subsidies consist of

reductions in employer contributions. The received subsidies have been rec-

ognised as deductions of personnel expenses in the income statement for the

months in which the personnel expenses were incurred.

2.21 Operating profit (EBIT)

IAS Standard 1 Presentation of Financial Statements does not define operating

profit. The Group has defined the concept as follows: operating profit is the net

total which is formed when other operating income is added to net sales and

the following items are detracted: the cost of materials and services, personnel

expenses, other operating expenses, the cost adjustment of work performed by

the entity and capitalised, depreciation, amortisation and potential impairment

loss. All other items of the income statement are presented below the operating

profit line.

3 Critical accounting estimates and judgements

The management of Enento Group makes estimates and assumptions concerning

the future as well as exercises judgement in applying the accounting principles

when preparing financial statements. Estimates and judgements are continually

evaluated, and they are based on historical experience and other factors, includ-

ing expectations of future events that are believed to be reasonable under the

circumstances. The resulting accounting estimates will, by definition, seldom equal

the related actual results. The estimates and assumptions that have a significant

risk of causing a material adjustment to the carrying amounts of assets and lia-

bilities within the next financial year are addressed below.

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3.1 Defining cash-generating units, allocating goodwill and assumptions used in

goodwill impairment testing

The management of Enento Group has exercised judgement in defining the

cash-generating units and the allocation of goodwill to those units. Based on

the judgement, the Group’s management has determined that goodwill is allo-

cated for goodwill impairment testing purposes to the following cash-generating

units: Finland, Sweden, and Norway and Denmark. The recoverable amounts of

the Group’s cash-generating units have been determined on the basis of value-

in-use calculations which require the use of estimates including projected future

cash flows, estimates of discount rate and the economic development of the

Group’s operating countries. On 31 December 2020, the Group’s goodwill amount-

ed to EUR 358,2 million (EUR 351,4 million). Enento Group tests the carrying value

of goodwill annually or more frequently if events or changes in circumstances

indicate that such carrying value may not be recoverable. Also see note 15 In

tangible assets.

3.2 Business combinations

Net assets acquired in business combinations are measured at fair value. The

measurement of the fair value of the acquired net assets is based on market

values of similar assets or estimates of expected cash flows (e.g. intangible as-

sets such as customer relationships, technology, marketing and trademarks). The

management of Enento Group has exercised judgement and made assumptions

in determining the fair values of the acquired intangible assets that are based

on assumptions and estimates on expected long-term development of net sales

and profitability, useful lives of the assets and discount rates. The management

believes that the estimates and assumptions used are sufficiently reliable for de-

termining fair values.

3.3 Accounting for the shareholder agreement

Enento Group Plc is party to a shareholder agreement concerning the control of

UC’s credit register and credit register information, as the company owned jointly

by the sellers of UC shares received, as part of the transaction, a small number

of UC’s B shares, granting their holders certain administrative rights. The B shares

do not entitle their holders to dividends or UC’s result or balance sheet. Further-

more, according to UC’s Articles of Association, among others, certain resolutions

concerning the credit register and credit register information require a unanimous

decision of the Board of Directors and the requirement for the making of such a

decision at UC’s General Meeting is that the minority shareholders vote in favour

of the decision. These requirements are applied to changes containing a risk that

UC is, from time to time, not able to fulfil its legal obligations and/or contractual

obligations concerning, among others, the use, availability or processing of the

credit register or credit register information, secured distribution of credit register

information and the interface used for the delivery of credit information. Enento

Group Plc has further undertaken not to transfer UC’s shares to any other party,

unless such a party is in possession of sufficient capacities and unless the party

does not commit to the same restrictions as Enento Group in relation to the credit

been to ensure the maintenance of the credit register and the control of credit

has exercised judgement in reporting the B shares with a value of SEK 1 000 as a

non-controlling interest in equity.

3.4 Capitalised development expenses

Costs incurred in the development phase of an internal project are capitalised

as intangible assets if a number of criteria are met. The management has made

judgements and assumptions when assessing whether a project meets these cri-

teria, and on measuring the costs and the economic life as well as the future cash

inflows generated by the development projects. Expected returns from capitalised

development projects involve estimates and judgement from the management

about the future net sales and related costs. These estimates involve risks and

uncertainties and it is possible that, following changes in circumstances, expected

returns from capitalised development projects change.

Enento Group assesses indications of impairment for capitalised development

projects. The value for capitalised development projects may decrease, if the

expected returns from new services change. Also see note 15 Intangible assets.

3.5 Recoverability of deferred tax assets

Judgement is required in assessing whether deferred tax assets and certain de-

ferred tax liabilities are recognised on the balance sheet. Deferred tax assets

are recognised only where it is considered more likely than not that they will be

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recovered, which is dependent on the generation of sufficient future taxable

profits. Assumptions about the generation of future taxable profits depend on

the management’s estimates of future cash flows. Estimates of these future cash

flows are dependent on the management’s estimates that relate among others

to the amount of future net sales, operating costs and finance costs. The Group’s

ability to generate taxable income depends also on factors related to general

economy, finance, competitiveness and regulations beyond the Group’s control.

These estimates and assumptions are subject to risk and uncertainty; hence it is

possible that changes in circumstances will alter expectations. This may impact

the amount of deferred tax assets and deferred tax liabilities recognised on the

balance sheet and the amount of temporary differences. Deferred tax receivables

amounted to EUR 486 thousand (EUR 740 thousand) and deferred tax liabilities

amounted to EUR 23 213 thousand (EUR 24 137 thousand) after netting the de-

ferred taxes on 31 December 2020. Deferred tax assets relate to non-deductible

net interest expenses that can be deducted from the following years’ taxable

income and deferred tax liabilities relate to intangible assets recognised in con-

nection with business combinations. See also note 24 Deferred tax assets and

liabilities.

3.6 Defined benefit pension obligations

The recognition of defined benefit pension obligations and plan assets are based

on actuarial calculations. The actuarial calculations require assumptions regard-

ing the discount rate used, future inflation rate, mortality and salary increases.

The actual outcome may deviate from the assumptions used, which may result in

changes in the carrying values of defined benefit pension items. See also note 22

Post-employment obligations.

4 Financial risk management

4.1 Financial risk factors

Enento Group’s activities expose it to a variety of financial risks: market risk (in-

cluding cash flow interest rate risk and currency rate risk), credit risk and liquidity

risk. The Group’s overall risk management programme focuses on the unpredict-

ability of financial markets and seeks to minimise potential adverse effects on the

Group’s financial position and performance.

Risk management is carried out by the Group’s finance function under pol-

icies approved by the Board of Directors. The Board provides principles for

overall risk management, as well as policies covering specific areas, such as,

interest rate risk, use of derivative financial instruments, and investment of ex-

cess liquidity.

4.1.1 Market risk

Cash flow and fair value interest rate risk

Enento Group’s interest rate risk arises from non-current financial liabilities

amounting to EUR 167,0 million (EUR 166,2 million) on 31 December 2020 and all of

which were issued with variable rates. Financial liabilities issued at variable interest

rates expose the Group’s cash flow to interest rate risk. The rise in interest rates

may affect the cost of available financing and the Group’s current financing costs.

Loans are denominated in EUR and SEK. The Group does not hedge against cash

flow interest rate risk. See also note 23 Financial liabilities.

On 31 December 2020, if interest rates on interest-bearing liabilities had

been 50 basis points higher with all other variables held constant, profit before

tax for the year would have been EUR 765 thousand (EUR 516 thousand) lower

as a result of higher interest expense on variable interest rate interest-bearing

liabilities. Interest rate sensitivity has been calculated by increasing the inter-

est curve by 50 basis points (due to low market interest environment the lower

scenario has not been presented). The interest position includes all external

variable interest rate interest-bearing liabilities.

Currency risk

The Group operates in Finland, Sweden, Norway and Denmark. A significant pro-

portion of the Group’s sales and expenses are incurred in currencies other than

the euro. The objective of currency risk management is to reduce the uncertainty

arising from the potential impact of fluctuating exchange rates on the value of the

future cash flows, receivables, liabilities and other balance sheet items. The Group

is exposed to currency fluctuations, especially in relation to the Swedish krona.

Transaction risk arises from the foreign currency cash flows related to busi-

ness operations and financing when transactions are carried out in a currency

other than the functional currency of each Group company. Sales and pur-

chases are mainly generated in the operating currency of each Group com-

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pany. As a result, the Group is not exposed to significant transaction risk. The

Group protects itself from transaction risks mainly by operational means. Cur-

rency derivatives (forward contracts) may be used if necessary to reduce or

eliminate uncertainty arising from fluctuations in exchange rates.

For derivatives not designated for hedge accounting, changes in the fair

values are recognised in other operating income, other operating expenses,

financial income or financial expenses depending on the purpose of the de-

rivatives.

The fair values of currency forward contracts are measured on the financial

statements date using generally applied measurement methods. The counter-

party bank also sends the Group a valuation report.

On the reporting date, 31 December 2020, the Group had one open curren

cy forward contract, which is recognised at fair value through profit or loss in

accordance with IFRS 9.

The Group’s operating result is particularly exposed to a translation risk

related to foreign exchange rates arising from the translation of the income

statements and balance sheets of foreign subsidiaries into the presentation

currency of the Group’s financial statements, which is the euro. The euro is also

the functional currency of Enento Group Plc. The Group mainly uses opera-

tional means to minimise the negative impacts of exchange rate fluctuations.

The Group aims to finance its Swedish operations in Swedish krona in order to

cover the changes in operating profit due to exchange rate fluctuations partly

in changes in finance costs.

Under normal circumstances, the Group does not use foreign currency de

rivative instruments to hedge against translation risks, but the Group applies

hedge accounting of net investment in a foreign operation for a loan. In Oc-

tober 2018, Enento Group Plc took out a bank loan of EUR 63,6 million, which is

denominated in Swedish kronas (SEK) and has a maturity date of 18 October

2023. The loan was drawn to finance an equity investment to be made in the

Swedish subsidiary and its spot rate has been designated as a hedge of the

net investment in this subsidiary. No ineffectiveness was recognised from net

investments in foreign entity hedges.

The impacts of the foreign currency denominated loan designated as a net

investment hedge to the Group’s financial position and profit for the period

were as follows:

31.12.2020

EUR thousand (unless otherwise stated)

31.12.2020 31.12.2019

Net investment in foreign operation

Carrying amount (bank loan) 65 923 63 320

SEK carrying amount (thousand) 661 491 661 491

Hedge ratio 1:1 1:1

Change in carrying amount of bank loan

as a result of foreign currency movements

(recognised in OCI)

-2 603 1 186

Change in value of hedged item used to

determine hedge effectiveness

2 603 -1 186

Weighted average hedged rate for the

year (EUR/SEK)

10,4848 10,5891

4.1.2 Credit risk

The Group is exposed to credit and counterparty risks through outstanding re-

ceivables from customers and cash balances. Credit and counterparty risks occur

when counterparties are unable or unwilling to fulfil their obligations.

Credit risk is managed in the Group’s finance function, which is responsi-

ble for preparing the credit policy complied with in Enento Group. The Group

assesses the creditworthiness of a new customer, taking into account mainly

its financial position and past experience with the customer. When the credit

risk is assessed to be high, a guarantee payment is requested. The amount of

guarantee payments received was immaterial for the periods presented. The

Group’s client base is widespread hence there are no large concentrations of

credit risk. Majority of the clients are companies and the amount of consumers

is in minority.

The Group holds excess cash (bank accounts and short-term deposits) with

financial institutions whose credit rating is minimum ‘A’. The Group’s outstanding

receivables are not exposed to significant credit risk and its credit losses have

been minor. See also note 2.7 Accounts receivable and note 18 Account and

other receivables.

Accounts receivable and contract assets are derecognised when there is

no reasonable expectation of recovery. Indicators that there is no reasonable

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expectation of recovery include, amongst others, potential bankruptcy of the

debtor or inability to prepare a payment plan with the Group and delay of the

contractual payments for more than a year.

In accordance with the accounting policies, the Group applies a simpli-

fied approach to the recognition of expected credit losses, according to which

31.12.2020

EUR thousand

Not due

Due

1–30

days

Due

31–60

days

Due

61–90

days

Due

91–180

days

Due

181–360

days

Due

over 360

days

Total

Expected loss rate 0,03 % 0,1 % 3,6 % 8,8 % 17,6 % 50,0 % 100,0 %

Gross carrying amount – accounts receivable 15 217 1 895 458 150 335 445 472 18 972

Loss allowance 5 2 17 13 59 222 481 800

31.12.2019

EUR thousand

Not due

Due

1–30

days

Due

31–60

days

Due

61–90

days

Due

91–180

days

Due

181–360

days

Due

over 360

days Total

Expected loss rate 0,1 % 0,7 % 3,1 % 11,7 % 16,7 % 57,5 % 100,0 %

Gross carrying amount – accounts receivable 14 859 1 386 451 73 352 177 91 17 389

Loss allowance 9 9 14 9 59 102 154 355

Reconciliation of the closing loss allowances for accounts receivable on 31 December 2020 with the opening loss allowances:

EUR thousand

31.12.2020 31.12.2019

1.1. 355 126

Increase in accounts receivable loss allowance recognised in connection with business combinations - 71

Increase in accounts receivable loss allowance recognised in profit or loss during the year 566 296

Receivables written off during the year as uncollectible -160 -153

Reversal of unused allowance 41 17

Translation differences -1 -2

31.12. 800 355

expected credit losses on any trade receivables and contract assets are

recognised for the entire validity period according to the delay of payment

and different types of trade receivables. The loss-related deductible item on

31 December 2020 and 31 December 2019 was specified as follows for accounts

receivable and contract assets:

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 47

4.1.3 Liquidity risk

The Group’s ability to finance its operations depends mainly on the amount of

cash flows from operations and the sources of financing available.

Cash flow forecasting is performed on a Group basis, taking the Group’s net

debt position into account. The Group finance function monitors Enento Group’s

liquidity requirements to ensure it has sufficient cash to meet operational needs

while maintaining sufficient headroom on its undrawn committed loan facilities at all

times so that the Group does not breach loan limits or covenants. On 31 December

2020, the Group had undrawn interest-bearing credit facilities amounting to EUR

20 million (EUR 20 million).

Enento Group has a term loan and revolving credit facility agreement with Dan-

ske Bank A/S, OP Corporate Bank Plc and Nordea Bank Plc for a total value of EUR

180,0 million, consisting of a term loan of EUR 160,0 million and a revolving credit

facility of EUR 20,0 million. In accordance with the terms of the loan agreement, the

Company took out the term loan partly in EUR and partly in SEK. The loans mature

in October 2023. More information is provided in note 23 Financial liabilities.

The loan from a financial institution includes a financial covenant that is net debt

to EBITDA, calculated as defined under the terms of the financing agreement. The

covenants are monitored on a quarterly basis. The ratio of the Group’s net debt to

EBITDA adjusted according to the terms of the financing agreement was 2,6 (2,8)

on 31 December 2020. The covenant limit in accordance with the financing agree-

ment was 3,5 (4,0) on 31 December 2020. The Group met all of the covenants in the

months under review.

To facilitate efficient cash management in the Group, a multi-currency cash pool

arrangement has been implemented with Danske Bank A/S. An overdraft of EUR

15,0 million is included in the cash pool arrangement. The overdraft had not been

utilised on 31 December 2020.

Surplus cash is invested in bank accounts or short-term deposits with appropri-

ate maturities providing sufficient liquidity. The Group has not made investments in

short-term deposits in 2020 or 2019.

The table below shows future repayments, interest expenses and capitalised

interest expenses of the Group´s financial liabilities divided into maturity group

ings based on the remaining contractual maturity at the balance sheet date. The

amounts disclosed in the table are the contractual undiscounted cash flows.

31.12.2020

EUR thousand

Under 1 year 1–2 years 2–5 years

Over 5 years

Total

Loans from financial

institutions

2 048

163 971

168 067

Lease liabilities 2 284 2 037 2 062 1 837 8 219

Accounts payable 7 906 - - - 7 906

Total 12 238 4 085 166 033 1 837 184 192

31.12.2019

EUR thousand

Under 1 year 1–2 years 2–5 years

Over 5 years

Total

Loans from financial

institutions

2 036

2 030

164 567

168 635

Lease liabilities 2 389 2 131 3 508 2 025 10 053

Accounts payable 6 572 - - - 6 572

Total 10 998 4 162 168 076 2 025 185 260

4.2 Capital management

The Group’s objectives when managing capital are to safeguard the Group’s abil-

ity to continue as a going concern in order to provide returns and increase in

value of invested capital for shareholders.

The Group defines capital as including equity and loans from financial institu-

tions. The capital ratios monitored by the Group are the equity ratio and net debt,

with the latter being the most important ratio monitored by the Group. Net debt is

calculated as loans from financial institutions (included in ‘current and non-current

interest-bearing liabilities’) less short-term deposits and cash in hand and at banks.

The management does not have a target level for net debt but follows it regularly.

The table below shows the net debt position at reporting date.

EUR thousand

31.12.2020 31.12.2019

Loans from financial institutions 161 535 158 797

Lease liabilities 7 666 9 704

Cash in hand and banks 26 164 20 361

Net debt 143 037 148 140

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 48

The reconciliation of net debt, showing changes in cash flows and other changes, is presented below:

EUR thousand

Cash

Finance leases

under 1 year

Finance leases

over 1 year

Loans

over 1 year

Total

Net debt 1.1.2019 33 215 -130 -264 -169 849 -137 028

Cash flow -16 786 2 216 - 10 000 -4 569

Acquired through business combinations 4 322 -243 -127 - 3 952

Exchange rate adjustments -390 - - 1 186 795

Other changes - -4 119 -7 037 -133 -11 290

Net debt 31.12.2019 20 361 -2 276 -7 428 -158 797 -148 140

Cash flow 5 724 -2 127 0 0 3 597

Exchange rate adjustments 79 0 0 -2 603 -2 524

Other changes 0 2 162 2 003 -135 4 030

Net debt 31.12.2020 26 164 -2 241 -5 425 -161 535 -143 037

5 Acquisitions

Enento Group did not acquire any new businesses during the financial year

1 January–31 December 2020.

Proff acquisition

Enento Group acquired the shares of the business information service Proff in

Norway, Sweden and Denmark from its previous owner Eniro under an agreement

signed on 20 May 2019. The transaction was completed on 1 July 2019. The pur-

chase consideration for the acquisition was SEK 120,0 million, which was paid in

cash in one instalment. Interest of 5 per cent per annum, calculated for the period

between 1 January–1 July 2019, was added to the purchase consideration. The

interest payable at completion was SEK 3,0 million.

The Group has made an allocation of the consideration for intangible assets

identified and recognised in the acquisition. In the allocation of the purchase

consideration, EUR 3,0 million was allocated to customer relations, which will be

amortised in 3–5 years, EUR 0,6 million to trademarks, which will be amortised in

5 years, and EUR 1,9 million to technology, which will be amortised in 3–5 years. The

fair value of the acquired accounts receivable was EUR 0,8 million, which corre-

sponded to their book value at the time of acquisition. The accounts receivable

are expected to be collectable in their entirety. Goodwill in the amount of EUR 5,8

million was recognised in connection with the acquisition.

The figures from the Proff companies’ balance sheet and income statement

have been included in Enento Group’s consolidated balance sheet and income

statement starting from 1 July 2019. At the moment of acquisition, there were no ma-

terial mutual business operations between the Group and the acquired companies

that should have been taken into account in the combination of business activities.

The consolidated income statement includes EUR 4,9 million in the Proff com-

panies’ post-acquisition net sales and EUR 0,5 million in profit. The full-year net

sales of the Group created by the acquisition would have amounted to EUR 150,7

million and profit for the period EUR 20,2 million if the business combination had

taken effect at the beginning of the financial year 2019.

Acquisition of the business of Solidinfo.SE

On 12 February 2019, UC Affärsinformation AB, part of Enento Group, signed an

agreement to buy the business operations of Solidinfo.SE from Social Media Sup-

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 49

port Sverige AB. Through the acquisition of these business operations, Enento

Group strengthened its business information service offering in Sweden. The core

of the Solidinfo.SE service consists of a free-of-charge business and financial in-

formation search service, similar to the business information service on Swedish

companies provided by UC Affärsinformation AB. The transaction was closed on

28 February 2019 and it had no material effect on Enento Group’s cash flow or

financial position. The acquisition price was not disclosed.

6 Net sales

Net sales by market area

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Finland 60 239 58 424

Sweden 77 461 74 661

Norway 10 612 7 463

Denmark 536 400

Other EU countries 1 483 2 367

Other countries 986 2 641

Total 151 317 145 957

Net sales by products and services

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Risk Decisions 93 542 95 486

SME and Consumers 38 798 33 931

Customer Data Management 8 067 8 127

Digital Processes 10 910 8 413

Total 151 317 145 957

Enento Group’s organisation consists of two types of units: business areas and

functional units.

Net sales growth is mainly attributable to the inclusion of the Proff companies’

figures in the consolidated financial statements for the full financial year as well

as the strong development of the Digital Processes product area.

Net sales for the financial year 2020 included EUR 162 thousand (EUR 172 thou-

sand) in revenue from long-term customer projects which is recognised under the

percentage-of-completion method.

Assets and liabilities based on contracts with customers are presented in note 19.

7 Other operating income

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Capital gains from the sale of property, plant and

equipment

149 66

Rental income 421 159

Other items 80 68

Total 649 293

8 Materials and services

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Purchases during the financial year -23 231 -22 562

External services -2 211 -1 936

Total -25 442 -24 499

9 Personnel expenses

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Salaries and benefits

-27 422 -28 453

Pension costs - defined contribution plans -4 279 -4 452

Pension costs - defined benefit plans

-447 -472

Social security costs -4 667 -5 196

Total -36 815 -38 574

For the financial year 2020, the personnel expenses include an accrued cost of EUR 660 thousand from

the management’s long-term incentive plan and, for the financial year 2019, EUR 850 thousand.

More information on pension costs is presented in note 22 Pension obligations.

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 50

10 Other operating expenses

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Other employment expenses -929 -1 561

Expenses related to premises -698 -1 320

Marketing expenses -3 597 -3 241

Paid commissions on sales -9 624 -4 606

Office expenses -2 017 -1 497

IT expenses -16 117 -15 195

Purchased services -5 583 -6 576

Additional payment for acquisition, arbitration institute

decision

-2 264 -

Other expenses -2 484 -3 115

Total -43 314 -37 111

Auditor’s fees

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

PricewaterhouseCoopers

Statutory fees -243 -302

Tax advisory -3 -13

Other services -26 -43

Total -272 -358

11 Depreciation and amortisation

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Amortisation on intangible assets -17 940 -17 134

Depreciation of property, plant and equipment -3 372 -3 369

Total -21 311 -20 503

Salaries and benefits of the management

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Salaries and benefits -2 523 -3 733

Pension costs – defined contribution plans -9 -9

Total -2 532 -3 741

The management’s salaries and benefits are itemised in more detail in note 27

Related parties.

Number of personnel on average

Employees

1.1.–31.12.2020 1.1.–31.12.2019

Full time 417 417

Part time and temporary 13 11

Total 430 428

In July 2019, approximately 60 employees were transferred to the Group as a result

of the acquisition of the Proff companies.

Enento Group Plc and UC Affärsfakta AB signed an agreement regarding the

outsourcing of Affärsfakta’s telesales operations on 14 May 2019. Enento Group

transferred its Swedish telesales operations to Affärsfakta i Sverige AB, a company

established by the management of UC Affärsfakta AB, effective from 1 September

2019. As a result of the outsourcing move, approximately 100 employees from the

Swedish telesales unit were transferred to Affärsfakta i Sverige AB with their cur-

rent benefits and obligations.

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 51

12 Finance income and expenses

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Finance income

Interest income from loan and other receivables 24 35

Exchange rate gains 247 119

Total finance income 271 154

Finance expenses

Impairment of financial liabilities at fair value through

profit or loss

- -100

Interest expenses from financial liabilities at amortised

cost

-2 118 -2 436

Net interest expenses relating to defined benefit pension

plans

-117 -92

Interest expenses for lease liabilities -153 -185

Other interest expenses -8 -25

Exchange rate losses -488 -106

Other finance expenses -114 -86

Total finance expenses -2 998 -3 029

Total -2 728 -2 875

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Exchange rate gains and losses in profit or loss

Exchange rate gains and losses in net sales 10 -1

Exchange rate gains and losses in purchases 16 3

Exchange rate gains in financial income 247 119

Exchange rate losses in financial expenses -488 -106

Total -215 15

13 Income tax expenses

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Current tax on profits for the financial year -6 564 -6 355

Change in deferred taxes 923 1 158

Total -5 640 -5 197

Income taxes recognised in consolidated income statement differ from the income taxes calcu-

lated using the Finnish tax rate as follows:

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Result before income tax 25 088 24 906

Tax calculated at Finnish tax rate -5 018 -4 981

Different tax rates of foreign subsidiaries -128 -88

Other:

Income not subject to tax 19 167

Non-deductible expenses -515 -238

Tax losses for which deferred income tax asset

was not recognised

- -

Other items 1 -55

Total -5 640 -5 197

Finland introduced interest deduction limitation rules starting from 1 January 2014

limiting the deductibility of intra-group net interests. Interests from the Parent

Company’s loans were subject to these interest deductibility limitation rules. EUR

22 268 thousand of the Parent Company’s net interest expenses for the financial

year 2014 was non-deductible for tax purposes. As a result, the Parent Company

generated taxable income against which previously unrecognised tax losses were

utilised. This non-deductible net interest from the financial year 2014 is carried for-

ward and can be deducted from the following years’ taxable income. Net interest

expense carryforwards do not expire.

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 52

14 Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to owners

of the parent company by the weighted average number of ordinary shares in

issue during the year. Diluted earnings per share reflect the possible impact of the

Group’s management’s long-term incentive plan.

1.1.–31.12.2020 1.1.–31.12.2019

Profit attributable to the owners of the Parent Company

(EUR)

19 447 836 19 709 667

Weighted average number of shares (number of shares) 24 004 917 23 986 073

Basic earnings per share 0,81 0,82

Management’s incentive plan (pcs) 24 475 27 219

Number of shares, weighted average, diluted 24 029 391 24 013 292

Diluted earnings per share 0,81 0,82

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 53

15 Intangible assets

EUR thousand

Goodwill Trademarks Customers Technology

Product development

and software costs

Work in progress and

advances paid Total

Cost at 1.1.2020 351 368 31 666 25 737 68 738 24 134 13 032 514 675

Additions - 1 - - 331 11 383 11 715

Disposals - - - - -1 933 - -1 933

Reclassifications - - - - 11 383 -11 383 -

Translation differences 6 864 1 254 773 2 583 316 102 11 893

Cost at 31.12.2020 358 233 32 922 26 509 71 321 34 231 13 133 536 350

Accumulated amortisation

at 1.1.2020

- -3 195 -3 601 -11 268 -9 782 - -27 846

Disposals - - - - 1 933 - 1 933

Amortisation for the financial

year

- -2 180 -2 557 -7 515 -5 688 - -17 940

Translation differences - -337 -248 -633 -73 - -1 291

Accumulated amortisation

at 31.12.2020

- -5 712 -6 405 -19 417 -13 610 - -45 144

Net book value at 1.1.2020 351 368 28 471 22 136 57 470 14 352 13 032 486 828

Net book value at 31.12.2020 358 233 27 210 20 104 51 904 20 621 13 133 491 205

EUR thousand

Goodwill Trademarks Customers Technology

Product development

and software costs

Work in progress and

advances paid Total

Cost at 1.1.2019 348 654 31 609 23 087 68 059 17 524 10 676 499 609

Additions 5 891 639 3 030 1 943 549 11 532 23 582

Disposals - 0 - -39 -2 399 -458 -2 896

Reclassifications - - - - 8 542 -8 542 -

Translation differences -3 176 -581 -380 -1 225 -82 -176 -5 620

Cost at 31.12.2019 351 368 31 666 25 737 68 738 24 134 13 032 514 675

Accumulated amortisation

at 1.1.2019

- -1 079 -1 339 -3 986 -6 674

-13 078

Disposals - 0 - 39 2 399 - 2 438

Amortisation for the financial

year

- -2 108 -2 253 -7 294 -5 474

-17 129

Translation differences - -8 -9 -27 -33 - -78

Accumulated amortisation

at 31.12.2019

- -3 195 -3 601 -11 268 -9 782 - -27 846

Net book value at 1.1.2019 348 654 30 530 21 749 64 073 10 850 10 676 486 531

Net book value at 31.12.2019 351 368 28 471 22 136 57 470 14 352 13 032 486 828

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 54

Impairment test for goodwill

The management monitors business performance at Group level. The Group has

three cash-generating units – Finland, Sweden, and Norway and Denmark. The

Group monitors goodwill at these levels. Goodwill has been recognised in the

Group’s cash-generating units as follows: Finland EUR 175,8 million, Sweden EUR

179,0 million, Norway and Denmark EUR 3,4 million. The recoverable amounts of the

company’s cash generating units are based on value in use calculations. These

calculations use cash flow forecasts for five years, based on forecasts approved

by the management and determined before tax.

Key parameters affecting the forecasts are the development of net sales and

the most important expense items. The forecasts take into account the Group’s

market position in its market areas, the general economic environment and the

realised development of the Group’s cash generating units in the most important

parameters affecting the forecasts. The average annual growths included in the

forecasts do not exceed the Group’s long-term goals in the forecast period. Cash

flows beyond the five-year period are extrapolated using the estimated long-

term growth rates presented below.

The key assumptions used for value-in-use calculations are as follows:

31.12.2020 31.12.2019

Finland

Long-term growth rate 1,5 % 1,5 %

Discount rate 6,2 % 6,8 %

Sweden

Long-term growth rate 1,5 % 1,5 %

Discount rate 5,6 % 7, 0 %

Norway and Denmark

Long-term growth rate 1,5 % 1,5 %

Discount rate 12,7 % 16,0 %

The discount rates used are pre-tax and reflect specific risks relating to the CGU.

As part of the performance review the management has performed a sensitivity

analysis around the key parameters. The results suggest that a situation in which

the carrying value of goodwill and other assets under impairment testing would

exceed the recoverable value is unlikely.

Changed parameters used in the sensitivity analysis were:

Finland:

• 10 %-point (10 %-point) decrease in annual net sales growth rate

• 7,5 %-point (5 %-point) decrease in annual EBITDA margin

• Pre-tax discount rate of 10,1 % (10,6 %)

Sweden:

• 7,5 %-point (5 %-point) decrease in annual net sales growth rate

• 5 %-point (2 %-point) decrease in annual EBITDA margin

• Pre-tax discount rate of 7,7 % (8,3 %)

Norway and Denmark:

• 10 %-point (10 %-point) decrease in annual net sales growth rate

• 8,5 %-point (7,5 %-point) decrease in annual EBITDA margin

• Pre-tax discount rate of 16,7 % (18,8 %)

The sensitivity analysis did not indicate impairment, when the parameters above

were changed one at a time, while others remained constant. If all the parameters

above would be changed at the same time, the recoverable amount would equal

the carrying value for the tested assets.

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 55

16 Property, plant and equipment

EUR thousand

Machinery and

equipment

Right-of-use,

machinery and

equipment

Right-of-use,

premises

Leased

machinery and

equipment

Other tangible

assets

Total

Cost at 1.1.2020 9 337 361 11 498 - 157 21 353

Additions 815 129 126 - 104 1 175

Disposals -516 -102 -54 - - -672

Translation differences 41 11 200 - 8 259

Cost at 31.12.2020 9 676 399 11 770 - 269 22 114

Accumulated amortisation at 1.1.2020 -7 099 -88 -2 180 - -38 -9 406

Disposals 368 24 11 - - 403

Amortisation for the financial year -1 000 -96 -2 233 - -42 -3 371

Translation differences -46 -5 -114 - -3 -168

Accumulated amortisation at 31.12.2020 -7 778 -165 -4 516 - -84 -12 542

Net book value at 1.1.2020 2 238 273 9 318 - 118 11 947

Net book value at 31.12.2020 1 899 234 7 254 - 185 9 572

EUR thousand

Machinery and

equipment

Right-of-use,

machinery and

equipment

Right-of-use,

premises

Leased

machinery and

equipment

Other

tangible assets

Total

Cost at 1.1.2019 9 206 - - 462 148 9 815

Adoption of IFRS 16 - 502 11 760 -462 - 11 800

Adjusted acquisition cost 1.1.2019 9 206 502 11 760 - 148 21 616

Additions 722 62 496 - 11 1 290

Disposals -574 -197 -648 - - -1 418

Translation differences -17 -6 -110 - -2 -135

Cost at 31.12.2019 9 337 361 11 498 - 157 21 353

Accumulated depreciation at 1.1.2019 -6 449 - - -68 -13 -6 530

Adoption of IFRS 16 - -68 - 68 - -

Adjusted accumulated depreciation at

1.1.2019

-6 449 -68 - - -13 -6 530

Disposals 423 83 11 - - 517

Depreciation for the financial year -1 073 -103 -2 173 - -25 -3 374

Translation differences -1 0 -19 - 0 -19

Accumulated depreciation at 31.12.2019 -7 099 -88 -2 180 - -39 -9 406

Net book value at 1.1.2019 2 757 434 11 760 - 134 15 085

Net book value at 31.12.2019 2 238 273 9 318 - 118 11 947

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 56

Financial instruments by category

31.12.2020

EUR thousand

Financial assets

at amortised cost

Financial assets at

fair value through

profit or loss Total

Assets as per balance sheet

Financial assets and other receivables 76 0 76

Account and other receivables 18 172 - 18 172

Cash and cash equivalents 26 164 - 26 164

Total 44 412 0 44 412

31.12.2020

EUR thousand

Financial liabilities

at amortised cost

Financial liabilities

at fair value through

profit or loss

Total

Liabilities as per balance sheet

Financial liabilities 169 201 - 169 201

Accounts payable and other payables 8 162 - 8 162

Derivatives – non-hedge accounting - 217 217

Total 177 363 217 177 581

31.12.2019

EUR thousand

Financial assets

at amortised cost

Financial assets at

fair value through

profit or loss Total

Assets as per balance sheet

Financial assets and other receivables 85 0 86

Account and other receivables 17 033 - 17 033

Cash and cash equivalents 20 361 - 20 361

Total 37 480 0 37 480

31.12.2019

EUR thousand

Financial liabilities

at amortised cost

Financial liabilities

at fair value through

profit or loss Total

Liabilities as per balance sheet

Financial liabilities 168 501 - 168 501

Accounts payable and other payables 6 977 - 6 977

Derivatives – non-hedge accounting - - -

Total 175 478 - 175 478

17 Financial instruments

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 57

18 Accounts receivable and other receivables

EUR thousand

31.12.2020 31.12.2019

Accounts receivable 18 972 17389

Credit loss allowance -800 -355

Net carrying value 18 172 17 033

Prepaid expenses and accrued income 6 638 5 860

Accrued income from long-term customer projects 114 120

Other receivables 105 314

Total 25 030 23 328

The fair values of account and other receivables equal their carrying amount. The

maximum exposure to credit risk is the carrying value of each receivable.

On 31 December 2020, the Group had due accounts receivable amounting to

EUR 3 755 thousand (EUR 2 530 thousand). These relate to a number of individual

customers.

The aging analysis of account receivables is as follows:

EUR thousand

31.12.2020 31.12.2019

Not due 15 217 14 859

Overdue by

Less than 1 month 1 895 1 386

1–3 months 608 524

3 months or more 1 252 620

Total 18 972 17 389

Credit loss allowance -800 -355

Total 18 172 17 033

Amount recognised as actual credit los 160 153

During the financial year, accounts receivable of EUR 160 thousand (EUR 153 thou-

sand) were recognised as actual credit losses due to non-collection of the ac-

counts receivable in question. The individually impaired receivables relate to sales

receivables of a number of independent customers.

On 31 December 2020, the carrying amounts of the Group’s account and other

receivables were denominated in EUR, SEK, NOK and DKK.

19 Assets and liabilities based on contracts with customers

EUR thousand

31.12.2020 31.12.2019

Assets based on contracts 831 833

Assets recognised on expenses based on contracts 114 120

Total 946 953

Advances received from contracts with customers -12 075 -10 247

Total -12 075 -10 247

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 58

Changes in contract assets and liabilities

EUR thousand

Assets

2020

Liabilities

2020

Assets

2019

Liabilities

2019

Opening balance 1 January 953 -10 247 1 162 -6 375

Acquired through business

combinations

- - - -3 415

Reclassifications from contract

assets to trade receivables

-5 849 - -2 800 -

Reclassifications from assets

based on settlements to expenses

- - - -

Advances for expenses recognised

for the financial year relating to

performance obligations

-6 - -41 -

Recognised sales proceeds from

contract liabilities during the

financial year

- 26 448 - 14 034

Sales proceeds not yet invoiced

recognised for the period

5 817 - 2 623 -

Advances received during the

period relating to unfulfilled per-

formance obligations

- -28 139 - -14 583

Translation differences 30 -136 10 92

Total net changes -7 -1 828 -209 -3 872

Closing balance 31 December 946 -12 075 953 -10 247

Of the opening balance for contract liabilities, EUR 10 247 thousand (EUR 6 375

thousand) has been recognised as revenue during the financial year 2020.

Transaction price allocated to remaining performance obligations

EUR thousand

31.12.2020 31.12.2019

Transaction price allocated to remaining performance

obligations

17 152 6 714

The Group has applied the practical expedient allowed by IFRS 15 and presented

the transaction price allocated to remaining performance obligations, which is

based on fixed monthly charges, only for customer contracts continuing for more

than 12 months. Of the transaction price allocated to remaining performance

obligations, EUR 6 263 thousand will be recognised as revenue in 2021 and EUR 10

888 thousand in 2022 and 2023.

20 Cash and cash equivalents

EUR thousand

31.12.2020 31.12.2019

Cash at bank and in hand 26 164 20 361

Cash and cash equivalents 26 164 20 361

21 Equity

The total shareholders’ equity consists of the share capital, the invested unre-

stricted equity reserve, translation differences and accumulated losses.

Shares and share capital

The parent company has one share class, and each share has equal right to

dividend. Each share carries one vote at the general meeting. All shares issued by

the parent company are fully paid. The shares have no nominal value.

The total number of shares was 24 007 061 on 31 December 2020 and 23 993 292

on 31 December 2019. In the financial year 2020 and 2019, the share capital of the

Company amounted to EUR 80 000.

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 59

Invested unrestricted equity reserve

EUR thousand

1.1.2019 351 690

Return of capital -11 517

31.12.2019 340 173

Return of capital -22 807

31.12.2020 317 367

On 25 June 2020, the Company paid EUR 14 644 thousand from the invested un-

restricted equity reserve as a capital return based on the resolution of the Annual

General Meeting held on 12 June 2020. On 26 November 2020, the Company

paid EUR 8 162 thousand from the invested unrestricted equity reserve based on

a decision by the Board of Directors pursuant to an authorisation granted by the

Annual General Meeting held on 12 June 2020.

Accumulated losses

EUR thousand

1.1.2019 -35 071

Distribution of dividend -11 277

Management’s incentive plan -289

Profit for the financial year 19 710

Other comprehensive income for the period -2 885

Restatement of translation differences -172

31.12.2019 -29 985

Management’s incentive plan 193

Profit for the financial year 19 448

Other comprehensive income for the period -232

31.12.2020 -10 575

Long-term incentive plans for the management are described in note 27

Related parties. An accrued expense of EUR 660 thousand (EUR 850 thousand)

for the financial year 2020 has been recognised as an increase in equity. In

addition, equity has been adjusted with the amount of awards paid, EUR 466

thousand (EUR 1 139 thousand), previously recognised as expense.

22 Post-employment obligations

As a result of defined benefit pension plans, the Group is exposed to plan asset

volatility risk, life expectancy risk and inflation risk materialising in the rate of salary

increases. Post-employment obligations are described in the accounting policies

of the consolidated financial statements under item 2.15 Employee benefits.

Liabilities related to defined benefit obligations

EUR thousand

31.12.2020 31.12.2019

Current value of defined benefit obligations 30 250 28 073

Fair value of plan assets -21 785 -20 158

Net amount of current value of obligations and fair value of

assets

8 465 7 915

Effect of minimum funding requirement / asset item - -

Recognised net obligation 8 465 7 915

Change in current value of defined benefit obli-

gations

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Current value of defined benefit obligations on 1 January 28 073 24 969

Acquired through business combinations - -

Benefits paid -691 -565

Current service cost 294 269

Interest expenses recognised in profit or loss 416 527

Actuarial gains (-) and losses (+):

Changes in financial assumptions 1 565 3 937

Experience adjustments -605 -653

Translation differences 1 198 -412

Current value of defined benefit obligations on 31 December 30 250 28 073

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 60

Change in fair value of plan assets

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Fair value of plan assets on 1 January 20 158 20 524

Acquired through business combinations - 0

Employer contributions 479 455

Interest income recognised in profit or loss 299 434

Income on plan assets excluding items included in interest

income

677 -314

Benefits paid -691 -565

Translation differences 863 -377

Fair value of plan assets on 31 December 21 785 20 158

Plan assets consist of the following items:

31.12.2020 31.12.2019

Shares 13,0 % 11,0 %

Debt investments

Government bonds 22,0 % 25,0 %

Mortgage loans 9,0 % 12,0 %

Corporate bonds 2 7, 0 % 26,0 %

Real estate 17,0 % 12,0 %

Other investments 12,0 % 14,0 %

Total 100,0 % 100,0 %

Items recognised in profit or loss

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Current service cost -294 -269

Interest expenses/income -117 -92

Net expense recognised in profit or loss -411 -362

Items recognised in other comprehensive income

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Remeasurements

Actuarial gains (-) and losses (+) 960 3 317

Income on plan assets excluding items included in interest

income

-677 317

Net amount recognised in other comprehensive income 283 3 634

Actuarial assumptions and sensitivity analysis

2020 2019

Discount rate 1,2 % 1,5 %

Salary increase rate 2,0 % 2,0 %

Inflation 2,0 % 2,0 %

Lifetime DUS 14 DUS 14

Sensitivity analysis of the effect of changes

EUR thousand

2020 2019

Discount rate, +1,0 % -6 153 -5 671

Discount rate, -1,0 % 8 195 7 555

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 61

23 Financial liabilities

EUR thousand

31.12.2020 31.12.2019

Non-current

Loans from financial institutions 161 535 158 797

Lease liabilities 5 425 7 428

Total non-current financial liabilities 166 960 166 225

Current

Lease liabilities 2 241 2 276

Total current financial liabilities 2 241 2 276

Total financial liabilities 169 201 168 501

Of the loans from financial institutions, EUR 95,6 million (EUR 95,5 million) were

EUR-denominated and EUR 65,9 million (EUR 63.3 million) were SEK-denominated

on 31 December 2020.

Loans from financial institutions

Enento Group has a loan agreement on a total of EUR 180 million of financing with

Danske Bank A/S, OP Corporate Bank Plc and Nordea Bank Plc.

The unsecured financing agreement consists of a term loan of EUR 160 million

and a revolving credit facility of EUR 20 million. The company drew down the term

loan on 25 October 2018, partially in euro and partially in Swedish krona in accord-

ance with the terms of the loan agreement. The loans mature in October 2023. The

Group’s revolving credit facility was unused on 31 December 2020 (EUR 0).

To facilitate efficient cash management in the Group, a multi-currency cash pool

arrangement has been implemented with Danske Bank A/S. An overdraft of EUR

15,0 million is included in the cash pool arrangement. The overdraft had not been

utilised on 31 December 2020.

The Group’s management has determined that there is no essential difference

between carrying value and fair value because there have not been significant

changes in interest rates since the issue date of the loans and margins of loans are

considered to reflect different conditions and the subordination of the loans with

reasonable accuracy.

Derivatives – non-hedge accounting

On 31 December 2020, Enento Group had one outstanding forward exchange

contract with a nominal value of EUR 11,7 million and the change in its fair value

was EUR -217 thousand. The remaining maturity of the contract is 3 months and

the change in fair value is presented in current non-interest-bearing financial

liabilities.

24 Deferred tax assets and liabilities

The net changes in deferred income taxes were as follows:

EUR thousand

2020 2019

1.1. -23 397 -24 355

Charged to balance sheet - -1 200

Charged to income statement 1 463 921

Recognised in comprehensive income 58 749

Translation differences -852 488

31.12. -22 727 -23 397

The Group’s deferred tax receivables amounted to EUR 486 thousand (EUR 740

thousand) and deferred tax liabilities amounted to EUR 23 213 thousand (EUR

24 137 thousand) at the end of the financial year. The movement in deferred in-

come tax assets and liabilities during the year, without taking into consideration

the offsetting of tax balances, is as follows:

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 62

The Group has recognised deferred tax assets amounting to EUR 650 thousand

(EUR 1 109 thousand) from non-deductible net interest expenses, which amounted

to EUR 3 251 thousand (EUR 5 543 thousand) on 31 December 2020. Non-deduct-

ible net interest expenses can be deducted from the taxable income in future

periods within the limits of interest deduction limitation rules for each year. Net

interest expense carryforwards do not expire.

Deferred tax assets

EUR thousand

Financial

instruments

Defined benefit

pension plans

Revenue

recognition

Non-deductible

net interest

expense

Management’s

incentive

plan Other Total

1.1.2019 140 916 30 1 764 90 0 2 940

Charged to balance sheet - - - - - - -

Charged to income statement -17 -19 160 -655 108 23 -400

Recognised in comprehensive income - 749 - - - - 749

Translation differences - -15 2 - - 0 -12

31.12.2019 124 1 631 192 1 109 198 23 3 276

Charged to balance sheet - - - - - - -

Charged to income statement 56 -14 52 -458 39 12 -313

Recognised in comprehensive income - 58 - - - - 58

Translation differences - 69 -8 - - -2 59

31.12.2020 180 1 744 236 650 237 33 3 080

Deferred tax liabilities

EUR thousand

Financial

instruments

Change in

depreciation

method

Allocation of

acquisitions

Capitalised

development

costs

Depreciation

difference

Other

Total

1.1.2019 131 53 24 047 2 883 179 - 27 295

Charged to balance sheet - - 1 219 - - -19 1 200

Charged to income statement -27 -53 -2 465 1 169 15 40 -1 321

Translation differences - - -464 -37 - 0 -500

31.12.2019 105 - 22 337 4 016 194 21 26 673

Charged to balance sheet - - 0 - - 0 0

Charged to income statement -27 0 -2 610 810 21 30 -1 776

Translation differences 0 0 711 202 0 -3 910

31.12.2020 78 0 20 439 5 027 215 49 25 807

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 63

25 Other current liabilities

EUR thousand

31.12.2020 31.12.2019

Advances received from unrecognised net sales 11 611 10 002

Advances received from long-term customer projects 463 245

Total 12 075 10 247

EUR thousand

31.12.2020 31.12.2019

Accounts payable 7 906 6 572

Other liabilities 3 334 2 692

Accrued expenses 13 048 12 550

Total 24 288 21 814

Accrued liabilities consist mainly of accruals of personnel expenses.

26 Contingent liabilities

Own guarantees

EUR thousand

31.12.2020 31.12.2019

Pledges 116 196

Minimum rent commitments for short-term lease agreements

EUR thousand

31.12.2020 31.12.2019

No later than 1 year 14 223

Total 14 223

The minimum rent commitments for short-term lease agreements are presented

for leases with a term of 12 months or less.

Low value lease agreement commitments

EUR thousand

31.12.2020 31.12.2019

Due within the next financial year 211 694

Due later 126 1 044

Total 338 1 738

The minimum lease payments for the Group’s office equipment lease agreements

are presented for the financial year 2020 as low value lease commitments.

27 Related parties

The related parties of the Group consist of group entities and shareholders

exercising significant influence over the Company, as mentioned in note 28. The

shareholders who have had the right to nominate a representative in the Com-

pany’s Board of Directors are considered having significant influence in the Com-

pany. In addition, the key management persons, including the Board of Directors,

CEO and Executive Team, are related parties of the Group, as well as their close

family members and companies, where the above mentioned persons exercise

controlling power.

The following transactions were carried out with related parties:

1.1.–31.12.2020

EUR thousand

Sales of goods

and services

Purchases of

goods and

services

Finance

income and

expenses

Shareholders having a signifi-

cant influence over the Group

11 753 -356 -681

Total 11 753 -356 -681

31.12.2020

EUR thousand

Receivables Liabilities

Shareholders having a signifi-

cant influence over the Group

1 301 54 065

Total 1 301 54 065

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 64

1.1.–31.12.2019

EUR thousand

Sales of goods

and services

Purchases of

goods and

services

Finance

income and

expenses

Shareholders having a signifi-

cant influence over the Group

11 622 - 556 -788

Total 11 622 - 556 -788

31.12.2019

EUR thousand

Receivables

Liabilities

Shareholders having a signifi-

cant influence over the Group

1 188 53 268

Total 1 188 53 268

Liabilities to related parties include a loan on market terms and conditions and

loan-related accrued interest with Nordea Bank Oyj. The loan is on market terms

and is described in more detail in note 23 Loans from financial institutions.

Transactions with related parties have been carried out on an arm’s length

basis. During the financial year, the Group’s related party transactions with key

persons in management and members of the Board of Directors consisted of nor-

mal salaries and fees.

Long-term incentive plans for the management

Long-term incentive plan for the management 2018–2020

The target group of the share-based long-term incentive plan decided on by the

Board of Directors in August 2018 includes approximately 23 key persons of Enento

Group, including the members of the Executive Team. In order to participate in

the plan and receive an award, the participant must purchase Enento Group Plc’s

shares or allocate previously held Enento Group shares to the programme in the

number determined by the Board of Directors.

The possible award for the commitment period depends on the continuation of

employment or service at the time of payment of the award and meeting of the

shareholding requirement. The award for the commitment period will be paid after

the end of the commitment period in 2020. Furthermore, the possible award for

the performance period is based on the total shareholder return (TSR) of Enento

Group Plc’s share and the Group’s adjusted EBITDA in 2020.

Awards payable under the plan will not total more than the value of approxi-

mately 300 000 Enento Group Plc shares, including also the amount paid in cash.

Any award shall be paid in net amount of shares after deducting the tax-related

costs. The accrued expense of EUR 401 thousand (EUR 823 thousand) for the fi-

nancial year has been recognised in personnel expenses.

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 65

Matching share plan

2018–2019

Performance Based Share Plan

2018—2020 / I 2021

Performance Based Share Plan

2018—2020 / II 2021

Original allocation date 21.9.2018 21.9.2018 21.9.2018

Performance period begins 1.9.2018 1.9.2018 1.9.2018

Performance period ends 31.12.2019 31.12.2020 31.12.2020

Vesting conditions

Shareholding,

employment

until payment

Shareholding, employment

until payment,

EBITDA and TSR

Shareholding, employment

until payment.

EBITDA and TSR

Vesting date 31.5.2020 31.5.2021 30.11.2021

Maximum duration, years 1,7 2,7 3,2

Time to maturity, years 0 0,4 0,9

Persons at the end of the financial year 0 23 23

Implementation method Shares Shares Shares

Changes in the plan during the period

Number

Matching

share plan

2018–2019

Performance-based share plan

2018–2020 / I 2021

Performance-based share plan

2018-2020 / II 2021 Total

1.1.2020

Outstanding at beginning of period 29 000 120 600 120 600 270 200

Changes during period

Granted - - - -

Forfeited - 6 300 6 300 12 600

Shares awarded 29 000 - - 29 000

31.12.2020

Outstanding at end of period - 114 300 114 300 228 600

Long-term incentive plan for the management 2020–2022

In December 2019, the Board of Directors decided on a new share-based long-term

incentive plan for key persons of Enento Group. The target group of the plan in-

cludes approximately 29 key persons, including the members of the Executive Team.

The incentive plan consists of one performance period covering the calendar

years 2020–2022. The potential rewards from the plan will be paid partly in Enen-

to Group Plc shares and partly in cash after the end of the performance period.

The potential rewards are based on the achievement of targets set for the total

shareholder return (TSR) of the Enento Group Plc share and the Group’s cumulative

adjusted EBITDA in 2020–2022. The rewards are also dependent on the continua

tion of the participants’ employment or service contracts at the time of payment.

Rewards payable under the plan will not total more than the value of approx-

imately 90 000 Enento Group Plc shares, including the amount paid in cash. The

maximum reward is defined as the gross amount of shares before the deduction

of the applicable taxes. The accrued expense of EUR 258 thousand (EUR 0 thou-

sand) for the financial year has been recognised in personnel expenses.

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 66

Performance-based share plan

2020—2022

Original allocation date 25.2.2020

Performance period begins 1.1.2020

Performance period ends 31.12.2022

Vesting conditions Shareholding, employment

until payment

Vesting date 31.5.2023

Maximum duration, years 3,4

Time to maturity, years 2,4

Persons at the end of the financial year 29

Implementation method Shares

Changes in the plan during the period

Number

Performance-based share plan

2020–2022

1.1.2020

Outstanding at beginning of period -

Changes during period

Granted 90 000

Forfeited 4 500

31.12.2020

Outstanding at end of period 85 500

Long-term incentive plan for the management 2021–2023

In December 2020, the Board of Directors decided on a new share-based in-

centive plan for key persons. The target group of the plan includes approximate-

ly 40 key persons, including the members of the Executive Team. This perfor-

mance-based share incentive plan is based on the corresponding plan launched

the previous year. The Group intends to launch a new long-term incentive plan

annually, but the start of each individual plan is subject to a separate decision

by the Board of Directors.

The incentive plan consists of one performance period covering the calendar

years 2021–2023. The potential rewards from the plan will be paid partly in Enento

Group shares and partly in cash after the end of the performance period. The

purpose of the cash payment is to cover taxes and tax-like charges incurred by

the participant for the reward. As a rule, no reward will be paid if the employment

or service contract terminates before the payment of the reward.

The plan offers the participants the opportunity to earn rewards if the per-

formance targets set by the Board of Directors are achieved. The performance

targets are based on Enento Group’s Total Shareholder Return (TSR) for 2021–2023

and Enento Group’s cumulative adjusted EBITDA for 2021–2023. If the performance

targets are met, the rewards will be payable in the first half of 2024.

Rewards payable under the plan will not total more than the value of approx-

imately 110 000 Enento Group Plc shares, including also the amount paid in cash.

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 67

The remuneration of Board of Directors

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Patrick Lapveteläinen 56 40

Petri Carpén 43 28

Bo Harald (member until 28 March 2019) - 25

Nicklas Ilebrand (member 29 June 2018–28 March 2019) - 19

Martin Johansson - -

Tiina Kuusisto 41 -

Carl-Magnus Månsson 43 27

Petri Nikkilä (member 28 March 2019–12 June 2020) 40 -

Minna Parhiala (member from 12 June 2020) - -

Anni (Anna-Maria) Ronkainen (member until 28 March

2019)

- 27

Total 222 167

Remuneration of the Executive Team members

(excluding the CEO)

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Salaries and benefits 1 348 1 462

Long-term incentive bonus 412 900

Performance-based incentives paid in cash

201 161

Termination benefits - 41

Stay-on bonus - 88

Total 1 960 2 653

Remuneration of the CEO

EUR thousand

1.1.–31.12.2020 1.1.–31.12.2019

Salaries and benefits 264 259

Long-term incentive bonus 134 718

Performance-based incentives paid in cash

165 104

Pension costs – defined contribution plans 9 9

Total 572 1 089

The incentives have been reported on a payment basis and paid on the basis of the result for the

previous financial year.

The Group has a supplementary voluntary pension plan for the CEO that is clas-

sified as defined contribution plan and has a cost of EUR 8 500 per year. The CEO

will receive additional voluntary old age pension between ages 63 and 73.

The termination period for the CEO’s employment contract is 6 months. In ad-

dition, in case of termination of the employment contract, the CEO is entitled

to one-time payment under certain conditions that corresponds to six months’

salary.

The CEO’s contract of service and the assignment as the CEO of the Company

will expire at the end of the month during which the CEO reaches 63 years of age.

28 Group companies

The following table presents the Group’s subsidiaries as at 31 December 2020. The

Group had no shared functions as at 31 December 2020. All group companies are

related parties of the Group.

Parent company

Nature of activities Country of incorporation

Enento Group Plc Headquarter activities Finland

Subsidiaries

Group

ownership

(%)

Voting

rights

(%)

Suomen Asiakastieto Oy Operative company Finland 100,0 100,0

Emaileri Oy Operative company Finland 100,0 100,0

UC AB Operative company Sweden 9 9,9

100,0

UC Affärsinformation AB Operative company Sweden 100,0 100,0

Proff AB Operative company Sweden 100,0 100,0

Proff AS Operative company Norway 100,0 100,0

Proff ApS Operative company Denmark 100,0 100,0

Enento Group Plc and the sellers of UC shares signed a shareholder agreement concerning the control of

UC’s credit register and credit register information. The company owned jointly by the sellers received, as

part of the transaction, a small number of UC’s B shares, granting their holders certain administrative rights.

The B shares do not entitle to dividends and UC’s result or balance sheet.

CORPORATE

GOVERNANCE STATEMENT

SHARES AND SHAREHOLDERS

CONSOLIDATED

FINANCIAL STATEMENTS

PARENT COMPANY

FINANCIAL STATEMENTS

BOARD OF DIRECTOR’S REPORT

2020 Enento Group FINANCIAL REVIEW | 68

29 Events after the reporting date