Digia: Meeting with management - Danske Bank

Conclusion
We today hosted a meeting with Digia's CFO Kristiina Simola and Harri Vepsäläinen, SVP Digia Digital.
Overall, we got a positive impresssion, although no big news compared to comments given after the Q2 report three weeks ago. Digia reported stronger than expected Q2, with sales holding up well despite COVID-19 (up 8% y/y; helped by the more stable Services which grew by 13% y/y, compensating for -2% in Projects) and EBITA margin jumping to 11.7% from 8.8% year-ago, boosted by COVID-related savings from travel etc. The company reached target 10% EBITA margin in H1 20, but acknowledges that this was exceptionally good. Digia guides for 2020 EBITA to increase, but does not give guidance for H2. We however got a fairly positive impression, with the Services sales being stable and outlook for Projects probably not much worse than in Q2. Projects have been delayed rather than cancelled. Digia also has a sizable exposure to the public sector (up to 30% we believe), which adds to stability - even though Digia commented that pricing in public sector projects has declined to unattractive levels in some cases.