Board of Directors’ Report and
Consolidated Financial Statements
1 January – 31 December 2023
Financial period
Business ID: 2767842-8
Board of Directors’ Report and Consolidated Financial Statements
Financial period January 1 – December 31, 2023
Sitowise is a Nordic expert in the built environment with
strong focus on digitality. We provide design and consulting
knowhow to enable more sustainable and smarter urban
development as well as smooth transportation. Sitowise
offers services related to real estate and buildings,
infrastructure, and digital solutions both in Finland and
in Sweden. Global megatrends drive huge changes that
require a re-evaluation of the smartness in the built
environment – therefore we have set our vision to be
Redefining Smartness in Cities. The Group’s net sales were
EUR 211 million in 2023 and the company employs more
than 2,100 experts. Sitowise Group Plc is listed on the main
list of Nasdaq Helsinki under the trading symbol SITOWS.
www.sitowise.com
Consolidated Financial Statements 2023
Board of Directors’ Report and
SITOWISE GROUP PLC
2
Contents
BOARD OF DIRECTORS’ REPORT ................................................................................................5
Financial and alternative performance measures .....................................................................................30
CONSOLIDATED FINANCIAL STATEMENTS IFRS ...............................................................................33
Consolidated statement of comprehensive income ...................................................................................33
Consolidated statement of financial position .........................................................................................34
Consolidated cash flow statement ...................................................................................................35
Statement of changes in consolidated equity ........................................................................................36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS .........................................................................37
1 General information ......................................................................................................37
1.1 Accounting policies ............................................................................................................37
1.2 Translation of items denominated in foreign currencies .........................................................................37
1.3 Key decisions made by the management requiring discretion and main uncertainty factors relating to estimates .................38
2 Operating profit ..........................................................................................................39
2.1 Segment reporting ............................................................................................................39
2.2 Net sales ......................................................................................................................39
2.3 Other operating income ........................................................................................................41
2.4 Materials and services ..........................................................................................................41
2.5 Personnel expenses ............................................................................................................41
2.6 Other operating expenses ......................................................................................................41
2.7 Depreciation, amortization, and impairment ....................................................................................42
2.8 Earnings per share ............................................................................................................42
3 Operational assets and liabilities ..........................................................................................43
3.1 Business combinations ........................................................................................................43
3.2 Goodwill and other intangible assets ...........................................................................................44
3.3 Tangible assets ................................................................................................................46
3.4 Trade and other receivables ...................................................................................................48
3.5 Provisions .....................................................................................................................49
3.6 Accounts payable and other liabilities ..........................................................................................49
4 Financial items and capital structure ......................................................................................50
4.1 Financial income and expenses ................................................................................................50
4.2 Financial assets and liabilities ..................................................................................................50
4.3 Shareholders’ equity ..........................................................................................................52
5 Financial and capital risks .................................................................................................56
5.1 Management of financial risks .................................................................................................56
5.2 Management of capital risks ...................................................................................................57
6 Other notes ...............................................................................................................58
6.1 Group structure ...............................................................................................................58
6.2 Income taxes ..................................................................................................................59
6.3 Related party transactions ......................................................................................................61
6.4 Guarantees and contingent liabilities ...........................................................................................63
6.5 Disputes and litigation .........................................................................................................63
6.6 Major events after the closing date .............................................................................................63
PARENT COMPANY'S FINANCIAL STATEMENTS ..............................................................................64
Sitowise Group Plc income statement (FAS) .........................................................................................64
Sitowise Group Plc balance sheet (FAS) ..............................................................................................64
Sitowise Group Plc: Cash flow statement (FAS) ......................................................................................65
Sitowise Group Plc: Notes to the financial statements (FAS) ..........................................................................66
SIGNATURES OF THE BOARD OF DIRECTORS AND AUDITOR’S NOTE .........................................................69
Board of Directors’ proposal for the distribution of profit ..............................................................................69
Signatures to the financial statements and Board of Directors’ report .................................................................69
AUDITING ......................................................................................................................70
Auditor’s Report ....................................................................................................................70
Independent Auditor’s Reasonable Assurance Report on Sitowise Group Plc ESEF Financial Statements ..............................73
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
3
SITOWISE GROUP PLC
4Consolidated Financial Statements 2023
Board of Directors’ Report and
THE REPORT OFTHE BOARD OF DIRECTORS
significant client segment is the public sector, which accounts for
approximately 75 percent of net sales. In the private sector, key
client segments are construction companies and industrial and
energy sector companies.
The Digital Solutions business area (Digi) focuses on smart
geospatial solutions for the built environment, mobility, and
forest and natural resources sector, as well as consulting services
that support these fields. These services cover client-driven
information system development, proprietary product solutions,
analytics, information management and visualization, and
consulting services.
In Sweden, Sitowise provides services in buildings, infrastructure,
and digital solutions. The Sweden business area’s services include
building construction engineering with expertise in frame and
structure engineering as well as geotechnical design. It also has
a robust offering in complex installations in both buildings and
infrastructure, and expert services in underground installations
as well as land, water, and sewerage. As from 1 January 2023,
this business area includes digital solutions for infrastructure
maintenance planning, reporting and support for municipalities in
Sweden (Infracontrol), which were previously reported under Digi.
Sitowise demonstrated resilience and growth
in the challenging market environment
Sitowise is a leading technical consulting company with a
strong focus on digitality. Its over 2,100 experts design and
develop solutions to make daily life safe and convenient for
everyone living in the built environment or using different types
of infrastructure. The company has four business areas, whose
wide service offerings and broad client bases bring resilience over
economic cycles.
The Buildings business area offers building design, specialist
services, and consulting services for residential and commercial
properties, as well as for the needs of the healthcare sector,
energy and industry, for example. Sitowise acts as a partner in
both new construction and renovation projects. The business
area has distinctive design expertise in areas such as structural
engineering, building services technology (HVAC and electric),
acoustics design, and fire safety planning as well as construction
management services.
The services of the Infrastructure business area (Infra) cover
a wide range of urban development needs in diverse areas:
infrastructure, transport and mobility, urban development,
environment and water, as well as infrastructure project
management. Urbanization supports the investment needs
of municipalities and cities, and the business area’s most
KEY FIGURES (IFRS)
EUR million2023202220212020
Change
2022–2023, %
Net sales210.9204.4179.3160.13.2%
EBITA, adjusted17.020.421.120.6-16.6%
% of net sales8.1%10.0%11.80%12.90%
EBITA15.116.118.519.5-6.0%
Operating profit11.713.216.418.3-11.4%
Result for the period5.57.97.912.7-29.9%
Cash flow from operating activities before financing items and taxes23.922.722.831.55.4%
Net debt55.356.630.956.6-2.2%
Net debt / EBITDA, adjusted 3.0x2.6x1.4x2.6x
Equity ratio, %42.9%41.6%46.0%30.2%
Earnings per share (EPS), EUR *
)
0.160.220.229.69
Average number of personnel2,2112,1511,9691,8232.8%
*
)
Financial year 2020 is calculated with non-comparable number of shares and financial year 2021 is calculated using numbers of shares after IPO (3-12/2021) for best
possible comparability.
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
5
MARKET ENVIRONMENT IN 2023
In 2023, Sitowise’s market environment was mixed, with areas of
both stronger and weaker demand. Services related to the green
transition, security, and digital solutions for the built environment
enjoyed strong demand from both private and public sector
clients, providing growth opportunities especially for Infra and
Digital Solutions businesses. Demand for technical consulting
services from the public sector remained quite stable throughout
the year, although price pressure and competition increased
especially towards the end of the year.
In the Buildings business area, however, 2023 proved to be
even more challenging than anticipated. The deterioration of
the construction markets, particularly in housing construction,
continued throughout the year, significantly impacting the
Buildings business. Some adverse effects of the distressed
construction markets were also seen in the Infra and Sweden
business areas, whereas Digital Solutions was adversely
impacted by the slowing of demand in the private sector in the
latter half of the year.
Increasing interest rates and inflationary pressures affected
clients’ short-term decision-making, increasing price pressure and
competition in all business areas. All business areas were further
impacted by the negative calendar effect of two fewer working
days than in the previous year. In addition, the weakening of the
Swedish krona against the euro further lowered reported net
sales.
STRATEGY IMPLEMENTATION
Sitowise targets continued sustainable profitable growth and
value creation for its clients, other stakeholders, and society. The
company’s strategy for the years 2023–2025 was announced
at the end of February 2023 and it focuses on innovation,
sustainability, and efficiency. Sitowise also announced its new
vision – Redefining smartness in cities. Sitowise seeks growth
in several future-oriented areas, including renewable energy
sources, circular economy, biodiversity, renovation construction
and digital services.
During 2023, Sitowise actively drove forward multiple initiatives
linked to its strategic growth ambitions and continued to align
Sitowise’s culture, key processes, leadership principles and
management systems so that they best support its strategy
implementation in the future.
Progress under strategic pillars
Under "the most innovative" strategic pillar, Sitowise aims to
foster an innovative culture, build scalable SaaS business, and
enhance design environments, among other things.
In 2023, the innovation focus shifted from idea discovery
to commercializing smart services in collaboration with key
customers. New services released in 2023 include ESG risk
assessment, agile creation of digital twins and 3D scanning
of built assets as well as digital tools to help our real estate
and construction company clients in the smart management
of warranty time claims. In Sitowise’s second innovation
competition, a new service focusing on the ever-growing
importance of soil health was selected as the winner. With respect
to enriching design environments and processes with novel
solutions, Sitowise continued to strengthen its data and analytics
capabilities and continued to further explore the opportunities to
optimize expert work and workflows with generative AI tools.
Under "the most sustainable" strategic pillar, Sitowise wants to
lead the way to a sustainable future by concentrating on future
business opportunities, sustainability in client projects, and the
sustainability of its own operations.
In 2023, Sitowise defined renewable energy, climate change
mitigation, biodiversity and adaptation, and circular economy as
areas where it aims to grow data-based sustainability services.
Sitowise also redefined its sustainability services organization and
the Group’s sales function to support growth in these areas. The
acquisitions announced in the fourth quarter – Positive Impact
Finland Oy and Ahlman Group’s expert operations – further
expand Sitowise’s expertise and offering in this area.
Sitowise also decided to further develop its Sustainability Tool.
The tool, available on Sitowise’s Voima platform, helps project
teams to assess their own sustainability impact and actions taken
in an individual project. Its next version will give better visibility
for clients about the sustainability requirements concerning their
projects and understanding how Sitowise can help them to meet
these needs. The development phase was started in the fourth
quarter of 2023.
Sitowise also continued to develop its own sustainability. Sitowise
invested, for example, in the diversity, equity and inclusion (DEI)
training that is mandatory for its entire personnel. The company
also continued to develop its sustainability reporting to better
meet the European Sustainability Reporting Standards' (ESRS)
requirements in the future. In December, Sitowise also committed
to setting science-based targets (SBTs) for the company in the
coming years.
Under “the most efficient” strategic pillar, Sitowise targets a
lean, optimized operating model that enables its experts to focus
on client work and provides the best value for Sitowise’s clients. In
the first part of the year, the focus was especially on converting
strategic plans to operational initiatives.
Later in the year, transforming Sitowise’s sales culture and model
was a key focus area. A new sales organization was introduced
with three Group-wide strategic growth areas – industrial clients,
renewable energy and sustainability services. The second half of
the year also saw a heavy focus on new ERP and CRM systems
integrations. The rollouts of the new systems, including extensive
training and go-lives in Finland, took place in the fourth quarter,
having an adverse impact on utilization rate during the quarter.
However, the transition to new systems progressed well, and
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
6
the work to further develop Sitowise’s IT and service platform is
continuing in 2024 on a more normalized level.
Progress in strategic KPIs
In June, Sitowise published targets to grow its recurring revenue
to represent 10% of its net sales and to double its sustainability
service revenue from its current level of approximately EUR 5
million by the end of the strategy period. By the end of the year,
the share of recurring revenue increased from approximately 4
% of the Group’s net sales in 2022 to approximately 6% in 2023,
and sustainability services revenue increased from approximately
EUR 5 million in 2022 to approximately EUR 8 million in 2023.
Acquisitions
Sitowise also pursues growth via selected acquisitions in its
growth areas. In 2023, three acquisitions were announced:
• In May, Sitowise announced the acquisition of all shares
in Infrasuunnittelu Oy, a company providing national-level
road, street, and regional designs as well as surveying and
supervisory expert services and construction consulting for
its clients. The acquisition of Infrasuunnittelu Oy strengthens
Sitowise’s expertise especially in infrastructure services
offered to the mining industry. At the time of the acquisition,
Infrasuunnittelu Oy employed 17 people and in 2022 its net
sales amounted to approximately EUR 1.2 million.
• In November, Sitowise acquired Positive Impact Finland
Oy. The acquisition strengthens Sitowise's expertise in
sustainability services and related digital solutions offered
to companies and communities. Positive Impact's services
include, for example, carbon footprint calculators, carbon
handprint studies, sustainability programs, climate roadmaps,
and software related to sustainability. Positive Impact Finland
Oy had net sales of EUR 0.4 million in 2022 and it employed
seven people at the time of the transaction.
• In December 2023, Sitowise announced the acquisition of
Ahlman Group Oy’s expert business, which was closed after
the financial year in January 2024. The business acquisition
strengthens Sitowise's expertise especially in nature services,
including both diverse nature surveys and services that
support biodiversity. The clients of the acquired business
include wind power and other private sector companies, cities
and municipalities, among others. The acquired business had
estimated net sales of EUR 2.3 million in 2023, and 20 people
are joining Sitowise from Ahlman Group Oy.
All acquired companies will be integrated into the Infra business
area.
THE GROUP’S ORDER BOOK
In 2023, the Group’s order book decreased by 10 percent to EUR
164 (181) million compared to the record level of the end of 2022.
The decline was impacted especially by the decline in Buildings
business’ order book.
The order book includes a variety of projects in terms of size and
duration, which increases the stability of Sitowise's operations.
However, discontinuations and postponements of projects
increased especially in Buildings’ order book during 2023, which
may slow down the realization of the order backlog in 2024. A
significant postponement of project starts may have a detrimental
effect on the group's profitability, if the resources reserved for the
projects cannot be reallocated to other projects.
THE GROUP’S NET SALES AND PROFITABILITY
Net sales
EUR million20232022Change, %
Buildings70.879.4-10.9%
Infra65.660.09.4%
Digi
1)
30.022.135.4%
Sweden
1)
44.542.93.9%
Total210.9204.43.2%
1)
Figures for the comparison year have been adjusted to reflect the current
organizational structure.
Adjusted organic growth by business area
Adjusted organic Growth %
2023
Buildings-12.4%
Infra9.2%
Digi14.5%
Sweden5.2%
Total0.7%
Adjusted organic growth in net sales is calculated by excluding
acquisitions and divestments adjusted by the number of working
days and exchange rate impact.
In 2023, the Group's net sales increased by 3.2 percent (5
percent in constant currency) year-on-year. Organic growth was
1 (5) percent, in addition to which the acquisitions made during
2022 and the Infrasuunnittelu acquisition in May had an impact
on growth. The Infra and Digi business areas made a strong
contribution to organic growth, and good growth in Sweden
played its part, while Buildings had a clearly negative effect.
The weakening of the Swedish krona against the euro slowed
down the euro-denominated net sales growth during the period
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
7
by some 8 percent of Sweden's net sales and 2 percent of the
Group’s net sales. The number of working days was down by two
days year-on-year, in addition to which the implementation of
new ERP and CRM systems in Finland had a similar effect in the
fourth quarter.
Profitability
EUR million20232022Change, %
EBITA, adjusted17.020.4-16.5%
% of net sales8.1%10.0%
EBITA15.116.1-5.9%
Operating profit 11.713.2-11.1%
Result before taxes7.110.3-30.5%
Result for the period5.57.9-29.9%
Earnings per share (EPS), EUR0.160.22-28.4%
Adjusted EBITA decreased by 16.5 percent due to two working
days less compared to comparison period, the implementations
of the ERP and CRM systems in the fourth quarter, which
had an effect equivalent to the loss of two working days, the
challenging market situation in the Buildings business area and
partial softening of the market in other business areas, and a
weaker utilization rate overall. Items affecting comparability were
EUR -1.9 (-4.3) million, with significantly lower M&A expenses
compared to 2022 and a positive impact in Q2 of a receivable
from the Fennovoima project that was impaired in 2022, while
the restructuring costs increased in the financial year compared to
the previous year.
Operating profit in 2023 totaled EUR 11.7 (13.2) million. Both the
result before taxes for the period and the result for the period
decreased due to lower operating profit and higher financial
expenses. These were above the comparison period primarily due
to the increase in interest rates. In the comparison period financial
expenses were adversely impacted by currency fluctuations
related to intercompany loans.
FINANCIAL POSITION AND CASH FLOW
Equity attributable to owners of the parent company was EUR
119.3 (116.6) million at the end of the year.
Net debt was slightly lower due to the higher cash position, but
net debt/EBITDA tightened slightly due to the lower adjusted
EBITDA level year-on-year. Gearing decreased, reflecting typical
seasonal variation in working capital during the final quarter and
came in at 46.3% (48.4%) at the end of the year.
EUR million
31 Dec
2023
31 Dec
2022Change, %
Cash and cash equivalents15.615.41.3%
Interest bearing debt, total70.972.0-1.5%
Interest bearing debt, current1.01.00.0%
Interest bearing debt, non-current69.971.0-1.5%
Equity ratio, %42.9%41.6%
Net debt55.356.6-2.2%
Net debt / EBITDA, adjusted3.0x2.6x16.6%
Gearing, %46.3%48.4%
Sitowise agreed with its lenders in February 2023 to use the
extension periods provided for in its financing agreement. The
extension is for the same amount and at the same terms as the
original arrangement. The financing agreement now matures in
March 2026.
Cash flow from operating activities before financial items and
taxes was EUR 23.9 (22.7) million during January-December.
Cash flow from investing activities totaled EUR -5.4 (-32.5) million
in January-December, and the decline was associated with
acquisitions-related investments in the comparison period.
In January-December, cash flow from financing totaled EUR
-10.9 (12.9 million) and it mainly consisted of dividends, loan
repayments and reductions in lease liabilities. In the comparison
period, it also included loan withdrawals, share buybacks and
payments received from share issues relating to acquisitions.
The consolidated balance sheet total at the end of December
was EUR 278.4 (280.7) million. Goodwill in the balance sheet
amounted to EUR 158.0 (157.6) million. The goodwill impairment
test was done in Q4 using the updated forecast. The market
outlook was also re-examined together with updated WACC
assumptions. Pre-tax WACC-% was slightly lower year-on-
year at 10.8 (11.3) percent. There are no indications of need for
impairment.
INVESTMENTS IN RESEARCH AND
DEVELOPMENT (R&D)
The technical consulting industry is undergoing a major
transformation due to the climate crisis, digitalization, and global
uncertainty. Sitowise is committed to developing solutions
through The Smart City Lab, its innovation platform and R&D
community. The goal is to produce new sustainable business
ideas, track market changes, and support Sitowise’s innovation
culture.
Sitowise invests significantly in new innovations, directing at least
80% of its R&D budget to sustainable development services. In
2023, Sitowise spent around EUR 0.2 million on innovation, and
also invested in various business development projects. R&D
projects also received public funding.
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
8
BUSINESS AREA PERFORMANCE IN 2023
In 2023, all business areas were adversely affected by the
negative calendar effect of -2 working days compared to the
same in 2022. Additionally, the implementation of the new ERP
and CRM systems significantly impacted utilization rates in
Buildings, Infra, and Digital Solutions, corresponding to an impact
of -2 working days at the Group level.
Buildings
Buildings’ net sales decreased by 11 percent in 2023 and
amounted to EUR 70.8 million (79.4 million 2022). Net sales were
adversely impacted by the difficult market situation but had a
positive impact from the acquisition of Rakennuttajakaari in June
2022. The business area accounted for 34 (39) percent of the
Group’s consolidated net sales in 2023.
The market environment was a major challenge for the Buildings
business in 2023. The strong growth seen in the construction
industry in the preceding years reversed and construction
production plummeted. The higher-than-anticipated rise in
interest rates and the cost of living, combined with the growing
supply of apartments, reduced the number of new housing
project starts significantly. Also, state-supported apartment
production (ARA) was reduced.
The market situation had a particularly great impact on the
Buildings business area’s MEP (mechanical, electrical, and
plumbing) and structural engineering business. Renovation
construction suffered also, although less, from the market’s
downturn as the prolonged high interest rate level was reflected
in the financing decisions of renovation construction projects and
the hesitation of housing associations and property owners to
start projects.
During the first quarters of the year, the Buildings business was
adapted to better correspond to the prevailing market situation
with different vacation arrangements and temporary layoffs.
In August, Sitowise initiated change negotiations in Buildings
with the aim of securing the prerequisites for growth and a
more agile way of operating. The change negotiations ended at
the beginning of October and led to reductions of close to 80
employees. At the same time a leaner organizational structure
supporting more efficient client and project work was introduced.
Thanks to efficient workforce management and pricing actions,
the Buildings business managed to keep its utilization rate
and pricing at a decent level until the fourth quarter, when the
introduction of the Group’s new ERP and CRM systems, the
adaptation to a new organization in Buildings and low tendering
pipeline had a negative impact on them. The business area’s
order book declined in 2023, and at the same time the number
of projects put on hold increased and the materialization of the
order book extended to a longer period. New projects were won,
however, in all areas of the Buildings business in 2023.
During the first half of 2023, Rakennuttajakaari Oy was
successfully integrated and merged with Sitowise.
The Buildings business area continues to adjust its operations
to the weak market with efficient workforce management, cost
control and proactive sales activities. Increasing focus will be put
on segments with long-term demand, such as special services,
services related to energy, and security critical services. Specific
future growth areas also include commercial and logistics
buildings, automation, and digital solutions.
The market outlook for 2024 in Buildings is weak. Sitowise
expects that the Buildings business will still decrease in size in
the first half of 2024 and that the turn to growth can start only
towards the end of 2024. The medium- and long-term prospects
for construction renovation are, however, still good thanks to the
existing renovation backlog and the requirements imposed by EU
regulation, such as energy-efficiency requirements. Urbanization
continues too and creates demand for new apartments, positively
impacting demand as Finland’s economic outlook and new
construction market recover.
Infra
Net sales in the Infra business area increased by 9 percent in
2023 and were EUR 65.6 (60.0) million. The business area
accounted for 31 (29) percent of the Group’s consolidated net
sales.
Infra had a strong year and its growth clearly outpaced the
market in 2023. Growth was almost entirely organic, with a small
positive impact from the acquisition of Infrasuunnittelu Oy in
May. The number of employees increased, especially in areas
of high demand such as services related to the green transition.
Furthermore, successful pricing and sales initiatives and the
continued diversification of the client base to private-sector and
industrial clients supported top-line growth throughout the year.
In 2023, the division of the wider infra market into weaker and
stronger segments prevailed. The first were related to municipal
infrastructure design such as road and infra planning for new
residential areas and groundworks for new buildings, and the
latter included especially energy and environmental projects
related to the green transition. For example, environmental
assessments of wind power increased significantly, employing
numerous experts and enabling significant growth in this sector.
Due to the current geopolitical situation, demand for projects
related to safety and security increased clearly too. In Sitowise's
Infra business, the weaker and stronger areas balance out each
other.
The Finnish government’s infrastructure investments were also
on the wane and their focus has shifted clearly towards railway
projects. The infrastructure-related goals included in Finland's
new government program are positive from the perspective of the
Infra business, but the materialization of related projects is also
further delayed. The tendering rounds for the first projects are
expected to start towards summer 2024 at the earliest.
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
9
Infra managed to keep its order backlog at a strong level during
2023, even though there were hardly any starts of large projects
in infrastructure in general. As a highlight, the largest project in
Sitowise’s history, Light Rail Line, was completed successfully
in 2023 ahead of its original schedule and at a lower cost than
budgeted. This was all made possible by skilled and motivated
personnel.
Infra’s market environment is expected to remain stable in
2024 and the outlook for Infra is good. The business area’s
growth in 2024 will also be supported by the acquisitions of
Infrasuunnittelu Oy, Positive Impact Finland Oy and Ahlman
Group Oy’s expert business, as well as the Infra team’s strong
expertise, close client relationships and well-rounded customer
base.
Digital Solutions
The Digital Solutions Business Area’s net sales increased by 35%
in 2023 and were EUR 30.0 (22.1) million. The business area
accounted for 14% (11%) of the Group’s consolidated net sales.
Digital Solutions had a successful year in 2023. In the first half-of
the year, the business had a clear tailwind from the acquisition of
Bitcomp Oy, a pioneer in SaaS solutions for the geospatial data,
forest and natural resources sectors, in June 2022. The revenue
from Bitcomp’s LeafPoint SaaS solution grew strongly in 2023
and implementations for existing customers were completed after
summer. Organic growth of 14.5 percent was also supported by
good progress in other product sales.
The favorable market situation at the beginning of the year turned
gloomier towards the second half, as the weakening prospects
of the Finnish economy started to impact the demand and
investments of private sector clients, which declined. An exception
was the renewable energy sector, where investments in digital
solutions continued to grow rapidly. The public sector continued
to invest too, but challenges in the broader IT consulting market
increased competition and price pressure, particularly in larger
and public sector tenders.
Digital Solutions was successful in taking the increased
production cost into account in pricing, managing costs, improving
the invoicing rate, streamlining the product portfolio and creating
new business together with the Bitcomp team. Despite the
weakening market situation, strong profitability was maintained
due to a balanced and resilient business mix. An increasing share
of the order backlog is related to long-term projects and SaaS
business, which helps to carry the business through economic
cycles. The wider IT market change was strongly reflected in
recruitment, with talent becoming more readily available towards
the end of the year and wage inflation slowing down.
Towards the end of the year, demand for SaaS products such
as the Louhi GIS platform, Foresta, Routa, and Smart Analytics
and Maps, was at a high level. Changes in the built environment
and the upcoming new Finnish Building Act were reflected in the
municipal sector’s demand, which increasingly shifted towards
solutions offered by the Louhi GIS platform and AI-based Smart
Analytics applications built on top of the Ryhti built environment
information system. Sitowise has a good opportunity to create
a new market by developing Louhi and Smart Analytics services
to meet new regulatory needs. A focus on sales activity and
systematic account management is expected to positively impact
Digital Solutions’ business, and the share of recurring revenue
from the product business is expected to grow.
The combination of Sitowise’s SaaS and project business has
enabled flexible resource utilization in a changing market.
Sitowise’s strong expertise in geospatial information systems
and the built environment, data management skills, and digital
solutions offering enable it to stand out from its competition. Its
balanced service and client portfolio, coupled with the ability
to create new markets, particularly with SaaS products, enable
profitable growth both now and in the future.
The market situation will remain challenging, particularly affecting
software investment in the private sector and adding further
price pressure to public tenders. Growth opportunities are seen
in the product business, energy sector, and especially in the
digitalization development of the municipal sector. Overall, the
outlook for digital solutions remains positive.
Sweden
In 2023, the krona/euro exchange rate heavily impacted the
reported sales figures for the Sweden business area. While net
sales in constant currency were up by 12 percent in 2023, they
increased by 4 percent when reported in euros. The net sales
amounted to EUR 44.5 (42.9) million, which corresponds to
approximately 21 (21) percent of the Group’s consolidated net
sales in 2023.
Approximately two-thirds of the net sales growth was organic,
while the rest was related to the tailwind from the Mavacon, E60,
and Convia acquisitions completed in 2022.
Throughout 2023, Sitowise progressed significantly in integrating
and consolidating the Swedish operations under the legal entity
Sitowise Sverige AB. In October 2023, the Swedish business
area completed the merger of four subsidiaries – Mavacon, E60,
Convia Ingenjörsbyrå and Convia Infrastructure – and reduced
the number of legal entities from six to two. It also relocated
two of the acquired entities into common offices in Stockholm
and Falun. These mergers encourage greater collaboration and
provide a unified and clear platform for future development and
driving synergies both on the cost and revenue sides. The Digital
solutions part of the business continues for the time being to
operate under its own entity, Infracontrol AB.
Another important milestone achieved early in the year was the
consolidation of all services under the Sitowise brand. This move
has been influential in promoting the brand recognition necessary
for continuous growth as a key player in the Swedish market.
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
10
The technical consulting market in Sweden shifted from favorable
in the first quarter to moderately good in the fourth quarter.
The slowdown began in spring and certain segments faced
headwinds later in 2023. The residential housing segment
declined significantly, with building projects decreasing by over
a quarter from 2022. However, Sitowise’s favorable positioning
towards other segments meant the local housing market drop had
only a moderate impact on the business. The Swedish market is
still supported by the Infrastructure, Industrial, and Institutional
sectors, which saw an increase in started projects. Sitowise won
new projects related to hospitals, pharmaceutical factories, and
rails. Demand for Infracontrol’s digital solutions for infrastructure,
municipalities and traffic monitoring remained stable.
After summer, the business area shifted its focus to internal
integrations and was impacted by an abnormally high absence
rate due to sick leaves, holidays, and parental leaves. This slowed
down the growth significantly. To improve the performance in the
last quarter, an increasing focus was put on more proactive sales,
pricing excellence and diligent project management. The sales
setup was revised, including alignment with the Group’s sales
initiative. The positive impacts of these actions are expected to be
seen in the first half of 2024.
The market environment is expected to remain unchanged in the
coming months. However, there are some signs indicating a slight
market pick-up in early 2024, such as the restarting of halted
projects and increased tendering activity leading to more sizable
tenders. A clearer market recovery would require a continued
decline in inflation and lower interest rates.
PERSONNEL AND MANAGEMENT
Personnel
20232022Change, %
Number of personnel, average2,2112,1512.8%
Number of personnel, at the end of
the period
2,1432,232-4.0%
FTE per Business Area
20232022Change, %
Buildings742825-10.1%
Infra56551210.3%
Digi25420722.6%
Sweden35031411.3%
Group Functions63597.0%
Group total1,9741,9182.9%
The average number of personnel in the Group during the
financial period was 2 211 (2 151). At the end of the financial
period, the Group had 2 143 employees (2 232). The number of
full-time equivalent employees (FTE), however, increased during
the year. The key factor lowering the number of employees
was the market situation in Buildings, which led to personnel
adjustments in the form of temporary layoffs in the first half of
the year, and to reductions of close to 80 employees in the fourth
quarter. Key drivers of FTE growth in Infra, Digi and Sweden
were the acquisitions made in the latter half of 2022 and in 2023.
The strong growth of sustainability services contributed to FTE
growth in Infra, too.
Personnel expenses increased by 6.6 % in 2023 to EUR 138.4
(129.8) million half coming from the wage inflation and half from
the small increase in number of personnel and FTEs.
The average age of Sitowise’s employees was 40 (39) years. At
the end of 2023, students accounted for 10% (8%) of the Group’s
personnel. Women accounted for 34% (33%) of the Group’s
employees.
Of all employees, 84% (85%) responded to the personnel survey.
The main indexes measured in the survey are Overall index
(Average of all questions on a scale 1-5) which was 3,87 (3,98)
and eNPS (Employee Net Promoter Score) which was 18 (30).
Changes in the Group Management Team
On 12 April 2023, Timo Palonkoski resigned from his position as
Business Area Director of the Buildings business area and as a
member of the Group Management Team. On 3 August 2023,
Timo Räikkönen was appointed as Executive Vice President of
the Buildings business area and member of Sitowise’s Group
Management Team. He joined Sitowise from the position of
Executive Vice President of Destia's Urban Development and
Design Services and started in his position on 13 November 2023.
On 4 May 2023, Anna Wäck was appointed as Business
Area Director for Digital Solutions and member of the Group
Management Team. She joined Sitowise from the position of
Head of Global Offering, Pricing and Sales Development in
KONE's global maintenance business, and started in her new
position on 5 May 2023.
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
11
GROUP STRUCTURE
At the end of the financial period, the Sitowise Group consisted
of the parent company Sitowise Group Plc and the following
companies:
• Wholly owned by Sitowise Group Plc: Sitowise Oy, which is
the company’s main operational subsidiary in Finland, and
foreign subsidiaries: Sitowise Sverige AB, Infracontrol AB
and its wholly owned subsidiaries Infracontrol Espana SL,
Infracontrol Portugal Lda and Infracontrol Danmark ApS
• Sitowise Oy’s Finnish subsidiaries, Routa Systems Oy (51%),
Bitcomp Oy (acquired in June 2022, whose merger with
Sitowise Oy is pending and due to be registered 29 February
2024), Infrasuunnittelu Oy (acquired in May 2023, whose
merger with Sitowise Oy is pending and due to be registered
29 February 2024), Positive Impact Finland Oy (acquired
in November 2023, whose merger with Sitowise Oy is
pending and due to be registered in May 2024) and foreign
subsidiaries AS DWG (55 %) and Sitowise Consulting Oü
(100%, which is planned to be liquidated in February 2024).
During the financial period, the wholly owned subsidiaries
Rakennuttajakaari Oy and its wholly owned subsidiaries
Rakennuttajakaari Pohjanmaa Oy and Certimo Oy were
merged with Sitowise Oy on 28 February 2023, and Sitowise
Rakennuttajat Oy on 30 April 2023. In Sweden, E60 Elkonsult
Aktiebolag was merged with Sitowise Sverige Ab on 6 October
2023. Further, Mavacon Mark & VA Consult AB and Convia
Infrastructure AB were merged with Convia Ingenjörsbyrå AB on
6 October 2023, and Convia Ingenjörsbyrå AB was merged with
Sitowise Sverige AB on 9 October 2023. Sitowise Oy’s branch
office Sito Norge NUF was closed on 23 November 2023.
CORPORATE GOVERNANCE
Authorizations of the Board of Directors
The company has the following authorizations in force as decided
by the Annual General Meeting on 25 April 2023:
The Board of Directors is authorized to decide on the issuance
of shares as well as the issuance of special rights entitling to
shares referred to in Chapter 10, Section 1 of the Companies
Act as follows: The number of shares to be issued based on
the authorization shall not exceed 3,500,000 shares, which
corresponds to approximately 9.8 percent of all of the shares
in the company. The authorization covers both the issuance of
new shares as well as the transfer of treasury shares held by the
company. The Board of Directors decides on all other conditions
of the issuance of shares and of special rights entitling to shares.
The issuance of shares and of special rights entitling to shares
may be carried out in deviation from the shareholders’ pre-
emptive rights (directed issue). The authorization may be used,
among other things, to finance and carry out acquisitions or other
corporate transactions, to promote engagement, in incentive
systems, in order to develop the company’s capital structure, to
broaden the company’s ownership base, and for other purposes
as determined by the company’s Board of Directors.
The Board of Directors is authorized to decide on the repurchase
of the company’s own shares as follows: The number of own
shares to be repurchased based on the authorization shall
not exceed 3,500,000 shares in total, which corresponds to
approximately 9.8 percent of all the shares in the company.
However, the company together with its subsidiaries cannot
at any moment own more than 10 percent of all the shares in
the company. Own shares can be repurchased only using the
unrestricted equity of the company at a price formed in public
trading on the date of the repurchase or otherwise at a price
determined by the markets. The Board of Directors decides on all
other matters related to the repurchase of our own shares and,
inter alia, derivatives can be used for the repurchase. Own shares
do not have to be acquired proportionally to the number of shares
held by the shareholders (directed acquisition).
The authorizations are effective until the beginning of the next
Annual General Meeting, however no longer than until 30 June
2024.
The Board of Directors decided to exercise its existing share issue
authorization and carried out directed issues of 37,330 treasury
shares in connection with the acquisition of Infrasuunnittelu Oy
on 2 May 2023, and of 33,394 treasury shares in connection with
the acquisition of Positive Impact Finland Oy on 30 November
2023. At the end of the financial period, the Board’s remaining
share issue authorization amounted to 3,429,276 shares, and the
authorization for the repurchase of the company’s own shares
remains unused.
Shareholders' Nomination Board
The Annual General Meeting 2023 of Sitowise decided to
establish a Shareholders' Nomination Board to prepare the
proposals on the election and remuneration of the members of
the Board of Directors to be presented to the Annual General
Meeting. The three shareholders who hold the largest share of
all the votes in the Company on the first weekday in September
are each entitled to nominate one member to the Nomination
Board each year. In addition, the Chair of the Board of Directors
of Sitowise Group Plc serves as an expert member of the
Nomination Board. Members were appointed to Sitowise
Group Plc's Shareholders' Nomination Board in September. The
members of the Nomination Board are Juhana Kallio representing
Intera Partners Oy, Malin Björkmo representing Handelsbanken
Funds, Claes Murander representing Lannebo Funds and Eero
Heliövaara, the Chair of Sitowise's Board of Directors.
CORPORATE GOVERNANCE STATEMENT
AND REMUNERATION REPORT
Sitowise’s Corporate Governance Statement and Remuneration
Report are published together with the Annual and Sustainability
Report during week 11 in 2024.
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
12
Key figures per share
202320222021
Earnings per share (EPS)EUR0.160.220.22
Equity per share (BPS)EUR3.343.273.25
Dividend per shareEUR0.0*0.10.1
Dividend/earnings ratio%0.0045.4545.45
Effective dividend yield%0.001.951.24
Price/earnings ratio (P/E)20.2x23.4x36.6x
Share price development
Volume weighted average share priceEUR3.765.248.46
Lowest share priceEUR2.703.897.33
Highest share priceEUR5.148.2210.05
Share price on December 31EUR3.185.148.05
Market value of shares on December 31EUR million113.4183.3285.1
Trading volumeEUR million5.26.119.0
Trading valueEUR million19.732.0157.1
*
)
Board of Directors’ proposal to the Annual General Meeting.
For the weighted average adjusted number of shares during the
financial period and the adjusted number of shares at the end of
the financial period, see Note 4.3 to the financial statements.
Shareholders
At the end of the review period on 31 December 2023, the
number of registered shareholders was 6,061 (6,060). Nominee-
registered shareholders accounted for 37.7 (37.4) percent of the
company’s shares. The ten largest shareholders entered in the
book-entry register maintained by Euroclear Finland Oy owned
a total of 29.3 (30.3) percent. A list of these major shareholders is
available on the company’s website at www.sitowise.com.
The table below lists the ten largest shareholders on 31 December
2023. The information is based on the Monitor service provided
by the Swedish company Modular Finance AB: *
)
SHARES AND SHAREHOLDERS
Shares outstanding and share capital
At the end of the year, Sitowise Group Plc’s share capital was EUR
80,000.
The company has one class of shares. Each share entitles the
holder to one vote and an equal dividend. There were no changes
in the number of shares outstanding during the review period.
Sitowise Group Plc held 119,399 own shares on 1 January 2023.
The number of treasury shares declined by 37,330 in May when
the Group’s Board of Directors decided on a directed share issue
to the sellers of Infrasuunnittelu Oy, and by further 33,394 shares
in November when the Group’s Board of Directors decided on a
directed share issue to the sellers of Positive Impact Finland Oy.
For the key terms and conditions of share issues, see Note 4.3.1
to the financial statements. Sitowise Group Plc held 48,675 own
shares on 31 December 2023.
31 Dec 202331 Dec 2022
Registered share capital, EUR thousand8080
Registered total number of shares 35,665,92735,665,927
Treasury shares48,675119,399
ShareholderNumber of shares% of shares
1 Intera Partners Oy5,121,573 14.4%
2 Paradigm Capital AG3,575,309 10.0%
3 Lannebo Funds2,286,8886.4%
4 Handelsbanken Funds 1,910,0795.4%
5 Evli Fund Management1,583,000 4.4%
6 Ilmarinen Mutual Pension
Insurance Company
1,071,500 3.0%
7
SEB Funds
906,965 2.5%
8 DNCA Finance S.A636,618 1.8%
9 Varma Mutual Pension Insurance
Company
635,000 1.8%
10 Didner & Gerge Funds472,235 1.3%
10 largest, total18,199,167 51.0%
Total shares 35,665,927
*
)
Data may be incomplete for both the number of shares and shareholders.
It is not possible for the company to verify the accuracy or timeliness of the
information. The company is not responsible for the information supplied by the
service provider, which is given only as additional information. The company’s
shareholder register is available from Euroclear, and the company additionally
publishes any flagging notifications it receives as stock exchange releases.
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
13
Shareholders by sector on 31 December 2023
Sector
2023
Number of shares
2023
%
2022
Number of shares
2022
%
Households10,330,41928.96%10,475,95829.37%
Financial and insurance institutions, total8,199,30622.99%8,275,95023.20%
Public sector, total2,119,1105.94%2,351,2356.59%
Businesses, total1,311,5963.68%1,120,1643.14%
Foreign, total158,7800.45%58,2980.16%
Nonprofit organizations, total88,4980.25%33,9780.10%
Total22,207,70962.27%22,315,58362.57%
Nominee-registered13,458,21837.73%13,350,34437.43%
All shares, total35,665,927100.00%35,665,927100.00%
Source: Data is based on shareholder register maintained by Euroclear Finland Oy.
Shareholding of the Board of Directors and the Group Management Team on 31 December 2023
BOARD OF DIRECTORS
PersonPosition
2023
Number of shares
2023
% of shares
2022
Number of shares
2022
% of shares
Eero Heliövaara
1
Chairman109,2080.31%92,5200.27%
Tomi TerhoDeputy Chairman00.00%00.00%
Taina KyllönenBoard member9,3200.03%9,3200.03%
Mirel Leino-HaltiaBoard member5,5000.02%5,5000.02%
Elina Piispanen
2
Board member70,0000.20%70,0000.20%
Petri Rignell
3
Board member80,3400.23%80,3400.23%
Niklas Sörensen
4
Board member3,0000.01%--
Mats Åström
5
Board member2,5000.01%--
Leif Gustafsson
6
Board member--20,0000.06%
Total279,8680.78%277,6800.79%
1
Including both shares held by Heliövaara personally and shares held by Heliocabala Oy, which he controls
2
Including both shares held by Piispanen personally and shares held by Fit Advice Oy, which she controls
3
Including both shares held by Rignell personally and shares held by PriRock Oy, which he controls
4
Board member since 25 April 2023.
5
Board member since 25 April 2023.
6
Board member until 25 April 2023.
GROUP MANAGEMENT TEAM
PersonPosition
2023
Number of shares
2023
% of shares
2022
Number of shares
2022
% of shares
Heikki HaasmaaCEO70,0000.20%60,0000.17%
Jonas LarssonEVP, Sweden10,0000.03%10,0000.03%
Taija LehtolaEVP, Human Resources18,0000.05%18,0000.05%
Hanna MasalaEVP, CFO20,0000.06%9,0000.03%
Jannis MikkolaEVP, Infrastructure356,7401.00%356,7401.00%
Timo Räikkönen
1
EVP, Buildings8,6000.02%--
Turo TinkanenEVP, Information Technology 52,0000.15%52,0000.15%
Minttu VilanderEVP, Sustainability,
Brand and Communications
19,2000.05%19,2000.05%
Anna Wäck
2
EVP, Digital Solutions3,7500.01%--
Timo Palonkoski
3
EVP, Buildings--154,0000.43%
Teemu Virtanen
4
EVP, Digital Solutions--170,000 0.48%
Total558,2901.57%848,9402.38%
1
Started as EVP, Buildings on 13 November 2023.
2
Started as EVP, Digital Solutions on 4 May 2023.
3
EVP, Buildings until 30 April 2023.
4
EVP, Digital Solutions until 31 December 2022.
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
14
The company’s management was granted stock options in the
spring of 2021 and during the 2022 financial period. The table
in section 6.3.4 of the notes to the financial statements lists
the options held by the CEO and the members of the Group’s
Management Team. The Board members hold no options.
Flagging notifications
On 30 January 2023, Sitowise Group Plc received a notification
in accordance Chapter 9, Section 5 of the Finnish Securities
Markets Act from Handelsbanken Fonder AB, according to which
Handelsbanken Fonder AB’s direct holding of shares and votes
in the company increased to 5.05 percent on 27 January 2023.
At the end of 2023, Handelsbanken Fonder owned 5.4% of the
Company’s shares and votes.
On 28 September 2023 Sitowise received a notification in
accordance with Chapter 9, Section 10 of the Finnish Securities
Market Act from Paradigm Capital Value Fund SICAV. According
to the notification Paradigm Capital Value Fund SICAV's direct
holding of the shares and votes of the Company exceeded 10
percent on 28 September 2023. At the end of 2023, Paradigm
Capital Value Fund SICAV held 10.0 percent of the Company’s
shares and votes.
During the year, Sitowise received further 28 notifications in
accordance with Chapter 9, Section 5 of the Finnish Securities
Markets Act from Morgan Stanley & Co. International plc.
According to these notifications, Morgan Stanley & Co.
International plc’s indirect holding of shares and votes in Sitowise
Group Plc had either exceeded or fallen below the 5 percent
threshold of all shares and votes as a result of stock borrowing
agreements. According to the latest flagging notification, Morgan
Stanley held on 27 December 2023, as a result of stock borrowing
agreements, indirectly 3.4 percent of the Company’s shares and
votes, and through financial instruments 0.39 percent of the
Company’s shares and votes.
Share-based incentive plans
On 31 December 2023, Sitowise Group Plc had two performance-
based, long-term incentive plans in place: Performance Share
Plan 2023-2025 and Restricted Share Plan 2023-2025. The
company also had in place a long-term option program. All
three are further described at www.sitowise.com/investors/
governance/remuneration.
REPORT OF NON-FINANCIAL INFORMATION
Business model
Sitowise is a Nordic expert in the built environment with a
strong focus on digitality. Company offers sustainable design
and consultancy services for projects of all sizes to enable
more sustainable and smarter urban development as well as
smooth transportation. Sitowise has four business areas that are
Buildings, Infrastructure, Digital Solutions and Sweden. Value
creation for clients and other stakeholders is based on the strong
expertise and industry knowledge of Sitowise employees. In
future, the company aims to strengthen its position as one of the
leading providers of technical consulting and digital services for
the built environment and forest assets.
Principles of sustainability and materiality topics
Sitowise’s vision is to Redefine smartness in cities. The vision is
driven by global megatrends such as urbanization, renovation
backlog, sustainability, digitalization, and security. The vision
underlines Sitowise’s aim to redefine, create, and implement the
change that future societies need.
The company is committed to increasing the sustainability of both
its own operations and its projects and client relationships on a
long-term basis, and to reporting on and measuring its progress
in respect of sustainability. The Group also continuously develops
its sustainability business to meet the changing needs of its
customers.
Sitowise's Sustainability Program 2025 focuses on clearly
set sustainability targets and defined sustainability indicators
which guide actions taken. Sustainability is examined from all
perspectives of the ESG division: environmental, social, and
governance.
The Sustainability Program 2025 is based on a materiality
analysis that has set four objectives:
• We are carbon neutral in 2025
• We are the most equitable workplace with best employee
well-being in the industry
• We aim for sustainable economic growth
• We actively contribute to make our industry more sustainable
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
15
Key sustainability indicators
Target: Carbon neutrality 2025*
20232022
• Carbon footprint without any form of compensation (t CO-ekv/employee)**
*Sitowise joined Science-Based initiative (SBTi) in the end of 2023. The Carbon neutrality
target will be updated according to SBTi requirements during 2024.
**The carbon footprint of 2022 and 2023 are not comparable since the data for calculation
has developed. The 2023 footprint includes e.g. employee commuting for the first time. The
share of employee communing of total emissions 2023 is 32%.
1.89 CO
2
-ekv/person1.16 CO
2
-ekv/person
Target: Equitable workplace with best employee well-being
20232022
• Employee survey: I feel that the employer supports the wellbeing of employees3.77 (1–5)3.98 (1–5)
• Share of employees who have done the diversity, equity and inclusion
(“DEI”) training
58%Training started in 2023
Target: Sustainable economic growth
20232022
• Doubling Sustainability Services Revenue between 2022 and 2025
to EUR 10 million.
approx. EUR 8 million approx. EUR 5 million
• Client survey: Sitowise knows the industry’s developments well 4.10 (1–5)4.08 (1–5)
• Client survey: Evaluate Sitowise's operations in terms of developing new
innovative solutions (% of respondents who see Sitowise as a forerunner)
53%53%
• % of the innovation budget allocated to actions promoting sustainable development
The aim is to report the share for the whole RDI budget.
90%88%
Target: Make our industry more sustainable
20232022
• % of projects that have used the sustainability tool out of all of our client projects
*** Utilization rate of the Sustainability Tool in Finnish client projects. For 2023 the data is
for 31 October 2023. The Tool’s development phase started in Q4 and therefore reliable data
is not available for Q4
89%***86%***
• General public reputation and trust survey: Sitowise moves the industry in the right
direction with regard to society
3.5 (1–5)3.5 (1–5)
• General public reputation and trust survey: Sitowise is an industry pioneer in the
climate and environmental aspects
3.42 (1–5)3.28 (1–5)
• Personnel survey: I know how I can take sustainability into account in my work58%61% (answers 4 and 5
on scale 1–5
Hyvän hallintotavan indikaattorit
20232022
• Code of conduct training is done by all employees. From 2019 forward the Code of
conduct online training is a mandatory part of onboarding.
91%85%
• Incidents reported via anonymous Whistleblow channel. All cases are closed in
accordance with the company’s policy.
17 9
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
16
The UN's Sustainable Development Goals (SDG’s) are an
important part of Sitowise's sustainability work, and the
Sustainability Tool created by Sitowise is based on this
framework. The sustainability tool helps to identify and monitor
the material sustainability matters in client projects. During the
year, 89% of the company’s new projects set SDG-based targets
and indicators with Sitowise's Sustainability Tool. In financial year
2023, the Sustainability Tool was only used in Finland.
Sitowise continuously develops its own sustainability reporting.
In 2023, the company conducted a gap analysis to identify
the differences in its 2022 sustainability and the future
requirements of EU’s Corporate Sustainability Reporting
Directive (CSRD). At the end of 2023, Sitowise initiated Double
Materiality Analysis to identify both how Sitowise’s operations
impact people and the environment, but also to evaluate how
sustainability considerations impact the company itself and
its financial position in future. The work continues in the first
quarter of 2024. The analysis complements the comprehensive
Materiality Assessment conducted in 2021 as part of the launch
of Sitowise’s Sustainability Program 2025. The results of the
Double Materiality Assessment will guide both Sitowise's future
sustainability efforts and strategy as well as reporting.
Sustainability management
Sustainability efforts at Sitowise are guided by Sitowise’s
strategy, environmental policy, sustainability program, Code of
Conduct, and industry practices as well as the general principles
of social responsibility and the applicable legislation. Sitowise’s
management system and activities are ISO 9001 and ISO 14001
compliant. Data security is developed in accordance with the ISO
27001 standard and in Sweden occupational health and safety
matters are managed with ISO 45001 standard.
In addition, Sitowise is committed to the following international
declarations and agreements: UN Sustainable Development
Goals, Universal Declaration of Human Rights, Convention
on the Rights of the Child, ILO Declaration on Fundamental
Principles and Rights at Work, Rio Declaration on Environment
and Development, UN Convention Against Corruption, OECD
Guidelines for Multinational Enterprises, UN Global Compact
initiative, and from December 2023 onwards, Science-Based
Target initiative (SBTi).
The Group’s Sustainability Program 2025 is approved by
Sitowise’s Board of Directors. The CEO has overall responsibility
for sustainability. The Corporate Sustainability Officer directs
and promotes sustainability initiatives, and monitors and reports
on the indicators, goals, and achievements. The Corporate
Sustainability Officer is a member of Group Management Team
and provides updates on sustainability efforts to the CEO and, if
necessary, prepares accounts of different areas of sustainability
and progress in those areas. Business Directors and line
managers are responsible for the implementation of practical
measures. Group functions (finance, IT, HR, communications,
quality, safety and security) support the business areas in
reaching the sustainability goals.
Sitowise conducts all its procurement in a responsible way,
following the company’s Code of Conduct and procurement
practices. At Sitowise partnerships are valued, and in their
selection, the social and environmental aspects of sustainability
are particularly considered.
Even though the approval process of the European Commission’s
Corporate Sustainability Due Diligence Directive (CSDDD) is
delayed, Sitowise will review its due diligence process to meet
the prospective requirements. Due to the CSDDD directive,
companies need to establish procedures to address the impacts
on human rights and the environment in their value chains.
Environmental sustainability
The built environment has a significant impact on the
environment. As an expert organization, Sitowise's most
significant opportunities to reduce the negative impacts occur in
customer projects and collaboration with various stakeholders.
These opportunities have been actively pursued during the year
2023, e.g. with setting sustainability targets for 89% of customer
projects with Sustainability Tool; taking consistent steps towards
the goal to double sustainability services revenue between 2022
and 2025; developing new sustainable products and services
through innovation and participating in several significant
industry development projects.
Furthermore, as part of the goal related to industry advancement,
Sitowise has actively addressed sustainability issues with The
Smart City Talks that is Sitowise´s own media focusing on topical
themes of sustainable city development. During the year The
Smart City Talks events raised themes such as energy efficiency,
diversity, equity and inclusion (“DEI”) and radical innovation to
discussion with Sitowise’s experts, leaders and stakeholders.
In Sitowise's own operations its most significant environmental
impact is related with climate issues and the key environmental
target is to reach carbon neutrality by 2025. The objective of
minimizing the carbon footprint also guides the company towards
reducing energy and water consumption, careful sorting of
waste, using low-emission modes of travel and transport as well
as considering sustainability aspects in purchasing. To reach this
goal, the company works to systematically reduce its emissions.
The completion of this goal is tracked with an annual calculation
of the carbon footprint.
The emission data was developed during the year. It complicates
the comparison of carbon footprints between years. However, it
gives a clearer picture how to focus impactful climate actions in
Sitowise. In 2023, Sitowise's total carbon footprint was 3982t CO-
ekv, and per employee 1.89t CO-ekv. The majority of emissions in
our operations result from commuting to and from work, as well
as business travel.
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
17
Social sustainability
For Sitowise, social sustainability primarily means ensuring
the well-being of its employees. Sitowise is also committed to
employing students and carrying its responsibility in society.
To reach the most equitable workplace goal, Sitowise is
committed to actively improving the well-being of its employees
and listening to them. Sitowise is also committed to ensuring
diversity, equity and inclusion (“DEI”) in the company. These
goals require evolving leadership and Sitowise is constantly
training its leaders.
In 2023, employees’ stress management and recovery were
supported in various ways throughout the year. A new learning
path for health and well-being was published on Sitowise’s
e-learning platform StudyHub in Finland and will be opened
next year in Sweden. Sitowise also offers personal support to
personnel according to the early intervention model. As a part of
our well-being program, feedback from the personnel is regularly
invited. All employees are covered with health care and there
are several additional insurances provided. Company supports
wellbeing in many ways, for example by organizing common free
time activities in sites and supporting employees’ hobby clubs.
In 2023, Sitowise prepared an action plan based on the results of
the employee diversity survey. The company also offered training
about Diversity, Equity and Inclusion for all personnel. The target
is that all employees will do the training. At the end of the year,
six months after the trainings had started 58% of the employees
in Finland had done the training. In Sweden the training was
launched in October and employees have started to participate.
Results of the training will be followed through the annual
Employee Survey.
Sitowise's policies related to its own workforce are explicitly
aligned with internationally recognized instruments, including
the UN Guiding Principles on Business and Human Rights
that underscores the commitment to upholding human rights
and labor standards. This commitment is reflected in the
remuneration, recognition, and development policies.
NextGen is Sitowise’s trainee program aimed at students with
different backgrounds in Finland. The trainee program includes
working in actual projects under the guidance of Sitowise
employees as well as work life coaching that helps students direct
their competence development in the direction they want. In
2023 Sitowise had a total of 37 (68) NextGen trainees.
Ethical principles, corruption, and bribery
The Code of Conduct describes how Sitowise operates
sustainably and ethically as well as commits to complying with
the laws and regulations concerning the company in all the
countries in which it operates. At Sitowise, the Code of Conduct
online course is a mandatory part of job orientation. Sitowise
addresses its ethical principles to customers and collaborators.
Sitowise’s Code of Conduct states the following: We comply
with the laws and our commitments, we care about people
and our work community, we develop a sustainable and smart
environment, we take care of assets and information that are
in our responsibility, we procure sustainably, we do not accept
corruption, bribery, or extortion, and we report concerns and
violations.
The Whistle Blow channel is a contact and reporting channel
through which anyone can anonymously report suspected
violations of Code of Conduct or other regulations. To ensure
anonymity, the reporting channel is managed by an external
partner, NAVEX WhistleB. 17 reports were received in
2023. All notifications were internal, no notifications were
received from customers or other stakeholders. All reports are
treated confidentially, and the notifiers were provided with
comprehensive responses. Most of the notifications were
related to HR and workplace practicalities or the ongoing change
negotiations at Sitowise. These notifications did not require any
further actions or were resolved by referring to Sitowise’s existing
policies or guidelines. Only in a few cases concerning for example
inappropriate behavior and workload distribution, the matters
were discussed with the persons concerned and their team leads,
and necessary actions were taken by both the HR team and
business management.
Key risks related to non-financial
information and risk management
Sitowise’s business and strategy are based on competent
personnel, and skilled professionals are crucial for growth,
profitability and the implementation of the company’s strategy.
As stated on page 9 of the report under ‘Assessment of risks
and uncertainties’, the most pronounced personnel risks of the
Sitowise Group relate to the retention of current experts, well-
being of employees and the availability of new experts. Managing
these risks is based on the premise that it is important for the
company that its employees are healthy, motivated, and proud
of the impact that Sitowise’s services have on the environment,
communities, and people.
Each Sitowise employee contributes to the setting of their
personal targets and the assessment of their performance
and development needs and discusses expectations with his/
her manager at regular intervals and at least once a year.
The aforementioned risks are also managed by, for example,
supporting coping at work, offering flexibility in different life
situations, and providing a variety of training options for example
for both professional development and better management
of work-related stress. However, the best ways to increase
competence are learning on the job, teamwork, and sharing
experiences in the course of projects.
Well-being at work stems, above all, from good work
management and having access to training that builds
competence, as well as a good team spirit, interaction, and a
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
18
culture of solving problems together. Good leadership creates a
framework for efficient teamwork and success. Sitowise promotes
its personnel’s well-being systematically in cooperation with,
for example, its occupational health care providers and pension
providers in Finland and Sweden.
Due to the nature of Sitowise’s business, there are no significant
environmental risks associated with the Group’s own operations.
One risk related to the upholding of human rights and the fight
against corruption and bribery could be a failure to observe
Sitowise’s Code of Conduct, if this resulted in significant damage
to the Group’s finances or reputation or if the violations were
systemic, in which case the operations of the entire Group
could be affected. This risk is managed by clearly stating the
company’s position on human rights and discrimination in the
Code of Conduct, which applies to all employees of Sitowise,
and by instructing both the company’s personnel and partners
to report concerns or potential inappropriate conduct. The risk
of corruption and bribery, and the resulting damage, is also
controlled by always having more than one person check every
payment and purchase.
Sitowise and the EU taxonomy
The EU aims to be climate-neutral by 2050. To meet the climate
and energy targets, the EU has launched the European Green
Deal to ensure there are no net emissions of greenhouse gases
by 2050, and to direct investments towards sustainable activities.
For this purpose, a classification system for environmentally
sustainable economic activities, “the EU taxonomy”, has been
created. The EU taxonomy provides a common definition of
economic activities that can be considered environmentally
sustainable as well as technical screening criteria for each
environmental objective helping companies become more
climate-friendly and increasing security for investors.
The built environment has significant impacts on climate and on
environment in general. As Sitowise offers solutions in Finland
and Sweden for buildings and infrastructure, as well as digital
solutions, all related to the built environment, forest, and natural
assets, there is a great potential for minimizing the risks related to
climate and environment, reducing the environmental impact, and
participating in decarbonization, thus supporting the ambitious
goals of the climate-neutral EU. These solutions help Sitowise’s
clients take steps towards more sustainable and taxonomy-
aligned activities. In addition, EU taxonomy reporting also
supports the evaluation and planning of Sitowise’s sustainable
business model, and the sustainability services that Sitowise
offers to its clients.
Taxonomy accounting principles
EU Taxonomy required KPI’s, revenue, capex and opex are all
presented on separate tables. The company presents the share of
taxonomy-worthy turnover in euros of Sitowise Group Plc’s total
turnover for the financial year. Revenue is presented in financial
statement annex 2.2 and capex in annex 3.2 and 3.3. Opex is
presented in annex 2.6 but regarding Company’s view, the opex
are not suitable for Sitowise’s taxonomy reporting.
Calculating taxonomy-eligible turnover is done by identifying
the Company's business areas, which are likely to have turnover
according to the taxonomy criteria. The company determines
the percentage share within each industry according to each
corresponding taxonomy-worthy criteria. In the calculation, it
has been taken into account that the same turnover cannot enter
two different taxonomy-worthy functions. The company's capex
are generally investments for the entire company, so the same
calculation principle has been applied to them, but divided into
taxonomy classifications in relation to turnover.
Taxonomy-eligibility and taxonomy-alignment
Sitowise reported the proportion of the company’s turnover,
capital (CapEx) and operating expenses (OpEx) eligible under
the taxonomy regulation in relation to the objectives for climate
change mitigation and adaptation first time for the year 2021.
For the year 2022, the reporting also covered activities and KPI’s
aligned with the taxonomy, i.e., activities that were aligned with
the technical screening criteria making a substantial contribution
to the climate change mitigation and/or adaptation objective, “Do
No Significant Harm” (DNSH) criteria, and minimum safeguards.
For the year 2023, four new environmental objectives and
technical screening criteria were included in the taxonomy
classification system covering now all six environmental
objectives: climate change mitigation (CCM), climate change
adaptation (CCA), sustainable use and protection of water and
marine resources (WTR), transition to circular economy (CE),
pollution prevention and control (PPT), and protection and
restoration of biodiversity and ecosystems (BIO). At Sitowise,
the reporting for the year 2023 covers taxonomy-eligibility and
taxonomy-alignment for the climate change mitigation and
adaptation objectives, taxonomy-eligibility for the new four
environmental objectives, as well as transition activities, and
enabling activities. Transition activities are applied with regards
to the climate change mitigation objective and are activities for
which there are no technologically and economically feasible low-
carbon alternatives, but that support the transition to a climate-
neutral economy in a manner that is consistent with the pathway
to limit the temperature increase. On the other hand, enabling
activities are activities that enable other activities to make a
substantial contribution to one or more of the objectives.
The taxonomy reporting for the year 2023 was based on the
taxonomy assessment and report made in the previous year.
Furthermore, it took into account the amendments to the
taxonomy regulation as well as changes to Sitowise’s business
areas and services. The aim was also to develop Sitowise’s own
taxonomy assessment and reporting even further and follow
the path of strict interpretation of the regulation chosen in the
assessment and reporting for the year 2022.
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
19
For the year 2023, 35 % of Sitowise’s revenue was assessed as
taxonomy-eligible. These taxonomy-eligible activities included,
e.g., engineering activities and related technical consultancy
dedicated to adaptation to climate change (CCA 9.1), professional
services related to energy performance of buildings (CCM 9.3),
infrastructure for rail transport (CCM 6.14), infrastructure enabling
road transport and public transport (CCA 6.15), and data-driven
solutions for GHG emissions reductions. Sitowise was also able
to report new taxonomy-eligible activities, including conservation
of habitats, ecosystems and species (BIO 1.1), remediation of
contaminated sites and areas (PPC 2.4), and flood risk prevention
and protection infrastructure (CCA 14.2).
However, the consulting sector of which Sitowise is a part of, is
not yet included in the taxonomy regulation as its own activity,
and for several sectors where Sitowise provides solutions and
services, the design and engineering are not included in the
taxonomy-eligible activities. Therefore, Sitowise cannot report
these activities as taxonomy-eligible. One important activity is the
construction and real estate sector where Sitowise is contributing
to the design phase of construction of new building (CCM/CCA 7.1)
and renovation of existing buildings (CCM/CCA 7.2). In addition,
due to the scope of the regulation and the strict interpretation
of it, not all Sitowise’s taxonomy-eligible activities directly meet
all the technical screening criteria or DNSH criteria, and Sitowise
could not report taxonomy-aligned turnover for the financial
year 2023. These activities are reported in the template as
“Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities)” (A.2). However, Sitowise
does not generically consider these activities as environmentally
unsustainable activities and sees that the phrase used in the
taxonomy reporting to some extent challenging.
Sitowise does not carry out, fund, or has exposures to nuclear
or fossil gas related activities. The Template 1 according to the
Delegated Act (EU) 2022/1214 is presented in Table 1: Nuclear
and fossil gas related activities.
Enabling activities and transition activities
According to the taxonomy regulation, an activity can be
taxonomy-aligned when it in and of themselves contributes
substantially to one of the six environmental objectives, is a
transition activity, or when it enables other activities to make a
substantial contribution to the environmental objectives. These
enabling activities must not, however, lead to a lock-in in assets
that undermine long-term environmental goals, considering the
economic lifetime of those assets, and the activities should have a
substantial positive environmental impact on the basis of lifecycle
considerations.
In some extent, Sitowise’s built environment related activities
can be seen as enabling activities since they enable directly
several environmental objectives defined in the taxonomy
regulation through the solutions Sitowise offers to its clients.
This is significant especially in the construction and real estate
sector where the services provided by Sitowise directly enable
efficient solutions to climate change mitigation and adaptation in
construction of new buildings and renovation of existing buildings.
In addition, for example Sitowise’s ecological surveys enable the
conservation of habitats, ecosystems, and species. Thus, 19,4 %
of Sitowise’s revenue was assessed as enabling activities.
For the year 2023, no transition activities were identified in
Sitowise’s activities. Transition activities can be applied with
regards to the climate change mitigation objective. For example,
nuclear energy and natural gas related activities typically seen as
transition activities.
The summary of Sitowise’s non-taxonomy-eligible, taxonomy-
eligible, and taxonomy-aligned activities, including enabling
activities and transition activities, for the year 2023, are listed in
the template below. The official taxonomy reporting templates are
presented in the tables 2–4.
2023Turnover
Capital
expenditure
(CapEx)
Operating
expenditure
(OpEx)
Non-taxonomy-eligible
activities
45.6% 34.5% 0%
Taxonomy-eligible activities 35.0% 42.1% 0%
Taxonomy-aligned activities 19.4% 23.4% 0%
Of which enabling
activities
19.4% 23.4% 0%
Of which transition
activities
0% 0% 0%
Taking into account the core of Sitowise’s business model, for
Sitowise the operating expenditures are not relevant in the way
that taxonomy regulation presents them, and therefore, no
taxonomy-eligible or taxonomy-aligned OpEx has been identified.
Hence reported OpEx is 0 % for the year 2023. At Sitowise, there
is a direct relationship between research & development and
projects, and research & development will be taken into account
as part of personnel costs also in the future.
The Minimum Safeguards
International Platform on Sustainable Finance has presented a set
of criteria for minimum social safeguards in the EU taxonomy. The
criteria are divided into human rights, corruption and bribery, fair
competition and tax processes and observing related violations to
these.
Sitowise policies and practices which guide company’s employees
and operating environment are in line with international
commitments on social responsibility. The key processes to
ensure social responsibility in line with international commitments
are Code of Conduct and it’s implementation in daily work and
company's WhitleBlow channel for reporting misconduct and the
process defined for handling notifications.
At Sitowise Code of Conduct -course is part of the personnel
training programme and the course is also part of orientation
program of all new employee. The Code of Conduct covers,
among other things, the company's principles relating to human
and employee rights, corruption and bribery, and fair competition.
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
20
Sitowise also requires it’s partners to take company’s Code
of Ethics into account in their own operations. The company
conducts all its procurements responsibly and in compliance with
the Code of Conduct and procurement practices.
Bribery is considered the most likely form of corruption. Sitowise's
Code of Conduct prohibits corruption, bribery and extortion
and contains guidelines on how to deal with these issues. The
possibility of financial misconduct is reduced by applying the
so-called four-eyes principle, whereby at least two handlers must
confirm the accuracy of every purchase and travel invoice. The
company complies with tax regulations locally in all the countries
where it operates. Taxes are always paid correctly and on time,
benefiting local economies and societies.
Neither the company nor its management has been convicted of,
or charged with, any violations against human rights, corruption
and bribery, fair competition or taxation.
Development of operations and improving
the taxonomy reporting in the future
The common classification system for environmentally
sustainable economic activities enables environmentally
sustainable development for businesses, and Sitowise is
committed to be part of this sustainability change. However,
the fact that taxonomy regulation does not yet recognize
consulting sector as its own activity keeps challenging the
taxonomy assessment, and as a consequence only part of the
technical screening criteria can be seen applicable to assessing
Sitowise’s activities. Despite this, Sitowise recognizes that the
role of consulting sector is relevant to achieving the ambitious
environmental goals set by the EU Commission, and that the
Sitowise’s role is to first and foremost enable its clients to
contribute substantially to the environmental objectives and to
improve their operations so that they are even more sustainable
and taxonomy-aligned.
Sitowise also recognizes the potential for enabling activities in its
own operations and this will be one of Sitowise’s focus points on
the taxonomy assessment and reporting for the year 2024. As the
taxonomy regulation has a margin for interpretation, the future
guidelines to the regulation will be taken into account.
Sitowise follows the development of the taxonomy regulation
and the formation of best practices in the consulting sector and
is committed to providing added value to the clients by providing
solutions that enable taxonomy-alignment even further. Steps
have already been taken by developing taxonomy-aligned
solutions for climate change adaptation for construction and real
estate sector.
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
21
Table 1: Nuclear and fossil gas related activities
RowNuclear energy related activities
1. The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of
innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the
fuel cycle.
NO
2. The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations
to produce electricity or process heat, including for the purposes of district heating or industrial processes such as
hydrogen production, as well as their safety upgrades, using best available technologies.
NO
3. The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce
electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen
production from nuclear energy, as well as their safety upgrades.
NO
Fossil gas related activities
4. The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities
that produce electricity using fossil gaseous fuels.
NO
5. The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined
heat/cool and power generation facilities using fossil gaseous fuels.
NO
6. The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation
facilities that produce heat/cool using fossil gaseous fuels.
NO
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
22
Table 2: Proportion of turnover from products or services associated with Taxonomy-aligned economic activities
– disclosure covering year 2023
Financial year 2023YearSubstantial Contribution Criteria
DNSH criteria
('Does Not Significantly Harm')
Economic Activities
Code
Turnover
Proportion of Turnover,
year 2023
Climate Change Mitigation
Climate Change Adaptation
Water
Pollution
Circular Economy
Biodiversity
Climate Change Mitigation
Climate Change Adaptation
Water
Pollution
Circular Economy
Biodiversity
Minimum Safeguards
Proportion of Taxonomy
aligned (A.1.) or eligible (A.2.)
turnover, year 2022
Category
enabling activity
Category
transitional activity
MEUR%
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y/NY/NY/NY/NY/NY/NY/N%ET
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Electricity generation using solar photovoltaic technologyCCM 4.10.20.1%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Electricity generation from wind powerCCM 4.31.60.7%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Transmission and distribution of electricityCCM 4.90.10.1%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Infrastructure for rail transportCCM 6.140.40.2%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Construction of new buildingsCCM 7.112.45.9%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Renovation of existing buildingsCCM 7.220.69.8%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Installation, maintenance and repair of charging
stations for electric vehicles in buildings
(and parking spaces attached to buildings)
CCM 7.40.10.0%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Installation, maintenance and repair of renewable energy
technologies
CCM 7.60.00.0%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Infrastructure enabling road transport and public
transport
CCA 6.150.30.2%N/ELYN/ELN/ELN/ELN/ELYYYYYYY0%E
Water supplyWTR 2.12.81.3%N/ELN/ELYN/ELN/ELN/ELYYYYYYY0%E
Sorting and material recovery of non-hazardous wasteCE 2.70.10.0%N/ELN/ELN/ELN/ELYN/ELYYYYYYY0%E
Demolition and wrecking of buildings and other
structures
CE 3.30.40.2%N/ELN/ELN/ELN/ELYN/ELYYYYYYY0%E
Maintenance of roads and motorwaysCE 3.40.10.1%N/ELN/ELN/ELN/ELYN/ELYYYYYYY0%E
Conservation, including restoration, of habitats,
ecosystems and species
BIO 1.11.70.8%N/ELN/ELN/ELN/ELN/ELYYYYYYYY0%E
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
40.919.4%16.8%0.2%1.3%0%0.3%0.8%YYYYYYY0%
Of which Enabling40.919.4%16.8%0.2%1.3%0.0%0.3%0.8%YYYYYYY0%E
Of which Transitional00%0%T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
Infrastructure for rail transportCCM 6.146.22.9%ELN/ELN/ELN/ELN/EL
N/EL4%
Data-driven solutions for GHG emissions reductionsCCM 8.20.90.4%ELN/ELN/ELN/ELN/ELN/EL0%
Close to market research, development and innovationCCM 9.10.60.3%ELN/ELN/ELN/ELN/ELN/EL1%
Professional services related to energy performance
of buildings
CCM 9.318.28.6%ELN/ELN/ELN/ELN/ELN/EL1%
Infrastructure enabling road transport and
public transport
CCA 6.1512.05.7%N/ELELN/ELN/ELN/ELN/EL11%
Infrastructure for water transportCCA 6.160.30.1%N/ELELN/ELN/ELN/ELN/EL0%
Computer programming, consultancy and
related activities
CCA 8.229.714.1%N/ELELN/ELN/ELN/ELN/EL4%
Software enabling physical climate risk management
and adaptation
CCA 8.40.10.1%N/ELELN/ELN/ELN/ELN/EL0%
Engineering activities and related technical consultancy
dedicated to adaptation to climate change
CCA 9.10.90.4%N/ELELN/ELN/ELN/ELN/EL2%
Flood risk prevention and protection infrastructureCCA 14.20.20.1%N/ELELN/ELN/ELN/ELN/EL0%
Manufacture, installation and associated services for
leakage control technologies enabling leakage reduction
and prevention in water supply systems
WTR 1.10.20.1%N/ELN/ELELN/ELN/ELN/EL0%
Remediation of contaminated sites and areasPPC 2.43.81.8%N/ELN/ELN/ELELN/ELN/EL0%
Conservation, including restoration, of habitats,
ecosystems and species
BIO 1.10.70.3%N/ELN/ELN/ELN/ELN/ELEL0%
Turnover of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
73.735.0%12.3%20.4%0.1%1.8%0%0.3%23%
A. Turnover of Taxonomy-eligible activities (A.1+A.2)114.654.4%29.1%20.6%1.4%1.8%0.3%1.1%23%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities9645.6%
Total210.9100%
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
23
Table 3: Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities
– disclosure covering year 2023
Financial year 2023YearSubstantial Contribution Criteria
DNSH criteria
('Does Not Significantly Harm')
Economic Activities
Code
Turnover
Proportion of CapEx,
year 2023
Climate Change Mitigation
Climate Change Adaptation
Water
Pollution
Circular Economy
Biodiversity
Climate Change Mitigation
Climate Change Adaptation
Water
Pollution
Circular Economy
Biodiversity
Minimum Safeguards
Proportion of Taxonomy
aligned (A.1.) or eligible (A.2.)
CapEx, year 2022
Category
enabling activity
Category
transitional activity
MEUR%
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y/NY/NY/NY/NY/NY/NY/N%ET
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Electricity generation using solar photovoltaic technologyCCM 4.10.00.1%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Electricity generation from wind powerCCM 4.30.10.9%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Transmission and distribution of electricityCCM 4.90.00.1%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Infrastructure for rail transportCCM 6.140.00.2%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Construction of new buildingsCCM 7.10.87.1%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Renovation of existing buildingsCCM 7.21.411.8%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Installation, maintenance and repair of charging
stations for electric vehicles in buildings
(and parking spaces attached to buildings)
CCM 7.40.00.1%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Installation, maintenance and repair of renewable energy
technologies
CCM 7.60.00.0%YN/ELN/ELN/ELN/ELN/ELYYYYYYY0%E
Infrastructure enabling road transport and public
transport
CCA 6.150.00.2%N/ELYN/ELN/ELN/ELN/ELYYYYYYY0%E
Water supplyWTR 2.10.21.6%N/ELN/ELYN/ELN/ELN/ELYYYYYYY0%E
Sorting and material recovery of non-hazardous wasteCE 2.70.00.0%N/ELN/ELN/ELN/ELYN/ELYYYYYYY0%E
Demolition and wrecking of buildings and other
structures
CE 3.30.00.2%N/ELN/ELN/ELN/ELYN/ELYYYYYYY0%E
Maintenance of roads and motorwaysCE 3.40.00.1%N/ELN/ELN/ELN/ELYN/ELYYYYYYY0%E
Conservation, including restoration, of habitats,
ecosystems and species
BIO 1.10.11.0%N/ELN/ELN/ELN/ELN/ELYYYYYYYY0%E
CapEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
2.723.4%20.2%0.2%1.6%0.0%0.4%1.0%YYYYYYY0%
Of which Enabling2.723.4%20.2%0.2%1.6%0.0%0.4%1.0%YYYYYYY0%E
Of which Transitional0.00%0%T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
Infrastructure for rail transportCCM 6.140.43.6%ELN/ELN/ELN/ELN/EL
N/EL3%
Data-driven solutions for GHG emissions reductionsCCM 8.20.10.5%ELN/ELN/ELN/ELN/ELN/EL0%
Close to market research, development and innovationCCM 9.10.00.4%ELN/ELN/ELN/ELN/ELN/EL0%
Professional services related to energy performance
of buildings
CCM 9.31.210.4%ELN/ELN/ELN/ELN/ELN/EL3%
Infrastructure enabling road transport and
public transport
CCA 6.150.86.9%N/ELELN/ELN/ELN/ELN/EL13%
Infrastructure for water transportCCA 6.160.00.2%N/ELELN/ELN/ELN/ELN/EL0%
Computer programming, consultancy and
related activities
CCA 8.22.017.0%N/ELELN/ELN/ELN/ELN/EL42%
Software enabling physical climate risk management
and adaptation
CCA 8.40.00.1%N/ELELN/ELN/ELN/ELN/EL0%
Engineering activities and related technical consultancy
dedicated to adaptation to climate change
CCA 9.10.10.5%N/ELELN/ELN/ELN/ELN/EL5%
Flood risk prevention and protection infrastructureCCA 14.20.00.1%N/ELELN/ELN/ELN/ELN/EL0%
Manufacture, installation and associated services for
leakage control technologies enabling leakage reduction
and prevention in water supply systems
WTR 1.10.00.1%N/ELN/ELELN/ELN/ELN/EL0%
Remediation of contaminated sites and areasPPC 2.40.32.2%N/ELN/ELN/ELELN/ELN/EL0%
Conservation, including restoration, of habitats,
ecosystems and species
BIO 1.10.00.4%N/ELN/ELN/ELN/ELN/ELEL0%
CapEx of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
5.042.1%14.8%24.6%0.1%2.2%0.0%0.4%66%
A. CapEx of Taxonomy eligible activities (A.1+A.2)7.765.5%35.1%24.8%1.7%2.2%0.4%1.3%66%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities4.134.5%
Total11.8100%
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
24
Table 4: Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities
– disclosure covering year 2023
Financial year 2023YearSubstantial Contribution Criteria
DNSH criteria
('Does Not Significantly Harm')
Economic Activities
Code
Turnover
Proportion of OpEx,
year 2023
Climate Change Mitigation
Climate Change Adaptation
Water
Pollution
Circular Economy
Biodiversity
Climate Change Mitigation
Climate Change Adaptation
Water
Pollution
Circular Economy
Biodiversity
Minimum Safeguards
Proportion of Taxonomy
aligned (A.1.) or eligible (A.2.)
OpEx, year 2022
Category
enabling activity
Category
transitional activity
MEUR%
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y/NY/NY/NY/NY/NY/NY/N%ET
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
OpEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
%%%%%%%KKKKKKK%
Of which Enabling%%%%%%%KKKKKKK%E
Of which Transitional%%KKKKKKK%T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
OpEx of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
%%%%%%%%
A. OpEx of Taxonomy eligible activities (A.1+A.2)%%%%%%%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities100%
Total
100%
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
25
ASSESSMENT OF RISKS AND UNCERTAINTIES
The significant risks and uncertainties related to the Sitowise
Group’s business include operational, strategic, financial and ESG
risks, to which the Group’s financial performance is exposed.
The Group’s risk assessment is based on an annual survey that
was conducted again during the financial year 2023, and its
results have been discussed in the Group’s Board of Directors,
management team as well as business areas. The Sitowise
Group’s risk management process and responsibilities are
described on the Group’s website (www.sitowise.com).
Operational risksRisk descriptionRisk management
Personnel risksThe most pronounced personnel risks of the Sitowise Group
relate to the retention of current experts, well-being of
employees, and availability of new experts. Sitowise’s business
is based on competent personnel, and skilled professionals are
crucial for profitability, growth and the implementation of the
company’s strategy. A potential decline in Sitowise’s employer
image due to internal or external factors is a risk from the
perspective of employee engagement and retention.
Being the most well-known and desired employer is one
of the Sitowise Group's strategic focus areas, and great
emphasis is placed on active development of the culture and
HR practices. Also, maintaining a high quality of manager
work, for example through leadership training, is seen as an
important part of managing the personnel risks.
Project workThe Sitowise Group’s operational risks related the project
work include, among others, miscalculated tenders, claims
for compensation due to engineering mistakes or delays, and
exceptionally strict warranty and liability terms, which could, if
invoked, damage Sitowise’s profitability.
Risks related to tenders and projects are managed by means
of regular quality management and risk management
reviews and by complying with procedures pursuant to the
ISO-certified operating model. The Group has developed
a proprietary service platform called Voima to facilitate
the adoption of more efficient and consistent operating
methods. The Voima project management tool contains
project guidelines and templates, best practices, bidding
and project workspaces, and a risk assessment tool. Project
risks are managed already in the offering phase by means of
project guidance according to which an authorization from
the management of the relevant business area is required
before tendering for any contracts that are subject to
nonstandard terms and conditions. The guidance also covers
the implementation phase of projects. The risk assessment
addresses themes such as contract terms and liability,
schedule, resources, scope of the assignment, safety, and
sustainability. The Voima platform contains real-time data
that can be used to mitigate risks. Project risks are managed
through carefully thought-out pricing and a thorough review
of the tendered project and its problematic elements.
Damage risksDamage risks include IT system and cyber security risks.
Sitowise’s business is dependent on a well-working IT
infrastructure and uninterrupted access to IT-based tools
and systems, which are susceptible to faults and failures.
Malfunctions, interruptions, faults, cybersecurity breaches
or power cuts that affect IT systems can delay the delivery
of services, cause unexpected costs, and damage Sitowise’s
reputation.
Risks related to IT systems and cyber security are mitigated
by ensuring necessary resources and capabilities and by
investing in and upgrading systems to continuously improve
cyber security. The risks are further managed by training
employees, implementing proactive risk management
measures and ensuring that effective safeguards against
potential data loss or system failures are in place.
Strategic risksRisk descriptionRisk management
Market risksUncertainty created by changes in the global and local economy
and market conditions poses a risk to Sitowise’s business.
Rapid cyclical fluctuations in the economy and reduction in
the use of public funds or a diversion of such funds away from
the built environment may contribute to market stagnation.
Higher inflation, rising interest rates, the price of energy, and the
increased cost of construction materials create uncertainty in the
markets and may cause a decline in economic activity by leading
to, for example, a decrease or postponement of investments and
clients’ projects.
Sitowise is actively monitoring the economic and market
developments so that it can react to changes in its business
environment. Constant and focused development actions
in the business areas, such as increased sales focus,
establishment of strategic client segment teams and further
diversification of the client base, are utilized to safeguard the
company from rapid market changes.
M&A risksThe Sitowise Group’s growth according to the long-term financial
targets is partly based on corporate acquisitions, and the planned
growth may not materialize if suitable acquisition targets are
not available, transactions cannot be made at an economically
justified valuation level or acquisitions involve liabilities that
cannot be factored into the purchase price, or the targets set for
the acquisitions are not reached in the integration of the acquired
companies.
Sitowise actively reviews and manages its M&A pipeline and
focuses on targets which support the company's strategy
and fit the company's financial situation and market. When
defining the level of M&A activity, Sitowise is also considering
the balance sheet structure.
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
26
Strategic risksRisk descriptionRisk management
M&A risksSuccessful integration of the acquisitions is a key element of
the Sitowise Group’s growth strategy, and Sitowise is therefore
exposed to risks related to the integration process, which can
lead to additional costs, failure to implement synergies, and loss
of growth opportunities.
The company has a well-established integration process
which is based on its past experience from a vast number of
previous transactions. Careful planning of the integration and
ensuring good cultural fit already before the acquisition are
also key parts of transaction processes.
Technological
development
Failure to anticipate or utilize technological development trends
and tap into new innovations, for example through successful
commercialization of new smart services and ability to grow
ARR's share of business may impede the company's ability to
execute its strategy effectively. New technological developments
may also require the company to adapt its pricing and project
management models.
Innovations are one of the three strategic pillars of Sitowise's
strategy, with the aim of developing and engaging Sitowise's
employees and partners to innovate smart solutions
accelerating the industry transition. The focus is put on
fostering and evolving the company's innovation culture
and improving the coordination of internal development
opportunities through different tools and processes.
Customer risksThe Sitowise Group's largest customer groups are the public
sector, construction companies and housing companies. Loss
of a customer accounting for a larger portion of net sales could
have a significant financial impact. Even though procurement
from larger public customers is not always centralized but rather
an outcome of numerous procurement procedures, problems in
one service may be reflected in the purchases of other services.
Sitowise has a diversified client base, and the risk related
to the dependency on individual clients or client segments
is aimed to be mitigated by further diversification of the
company's client base by attracting new client from new client
sectors. The Sitowise Group has also strengthened its sales
resources by introducing a new sales model and organization.
Also, the implementation of the new CRM system is aimed to
support the client work moving forward.
Financial risksRisk descriptionRisk management
Financial market risksUncertainty in the financial markets or rising interest rates
leading to higher financing costs and reduced availability
(adequacy, timeliness, and favorable terms) is both a strategic
and a financial risk for the Sitowise Group. Sitowise finances its
business and investments with cash flow and debt financing
and needs external financing to implement its growth strategy.
External financing can expose Sitowise to risks related to
indebtedness and weaken its financial position.
The Sitowise Group carefully assesses possible financial risks,
and the Group’s liquidity (trade receivables and cash flows) is
monitored continuously. The Group also closely monitors its
leverage and focuses on improving it e.g. through a careful
approach to all possible acquisition cases. To mitigate the risk
of encountering challenges in securing financing, the Sitowise
Group fosters strong and transparent relationships with its
core banks as well as aims to maintain an active and open
dialogue with its shareholders to enhance financial credibility
and support.
Order bookDue to the business model’s high dependency on personnel,
maintaining a steady and profitable order book is of great
importance to the business.
The Sitowise Group aims to maintain a sufficient order book
through an extensive customer base, diverse workload,
focused sales efforts and continuous monitoring of the order
book.
Cost riskA rise in costs, such as in wage levels, ICT or premises costs
can have a negative impact on Sitowise’s profitability and
financial performance if it cannot revise the prices of its services
accordingly.
The Sitowise Group continuously focuses on pricing activities
and sales development actions, including the implementation
of a new CRM system as well as actions ensuring cost
effectiveness.
Geopolitical eventsThe global economic consequences of wars and other major
geopolitical events, such as inflation and higher interest rates,
may further slowdown market growth in the construction sector,
which could jeopardize Sitowise’s growth and profitability
aspirations. The war in Ukraine only has limited direct effects
on Sitowise. The company does not have offices in Russia,
Belarus, or Ukraine, nor does it export to these countries.
However, sanctions imposed on account of Russia’s aggression
and the changed operating environment outside of the scope
of the sanctions – as well as countersanctions – may create
uncertainties.
The risks related to the economic consequences of major
geopolitical events are examined and mitigated through
continuous monitoring and analysis of market developments
and the operating environment.
Financial risks are discussed in more detail in Note 5 to the financial statements.
Information on the sustainability and climate risks related to Sitowise's operations is presented in the Annual and Sustainability Report.
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
27
LEGAL PROCEEDINGS
Sitowise Oy has a pending legal proceeding with a former client
relating to a Finnish residential apartment building project from
a few years back. A substantial claim has been presented to
Sitowise by the counterparty, but according to the company’s
view, the claim is unfounded. Sitowise has also presented a
claim to the counterparty for the unpaid part of the project
payment, plus the delay interest. The company estimates that the
proceedings will take years.
RELATED PARTY LOANS
Sitowise Group Plc has given subordinated loans to its related
party company Fimpec Group Oy. The loans amounted to EUR
916,500 at the end of the financial period. The interest rate
on the subordinated loans is 8% p.a. The loans are subject to
the provisions of Chapter 12 of the Finnish Limited Liability
Companies Act.
SEASONALITY AND SENSITIVITIES
The seasonal variation of Sitowise’s business is affected by
the monthly allocation of annual working days, which in turn
is affected by the timing of public holidays (e.g., Easter and
Christmas) and employee vacation periods. The Group’s net sales
and profitability are generally at their lowest in the third quarter
due to the summer vacation season.
Calendar effects: Number of working hours based on
sales weighted business mix
202420232022
Difference
(2023 vs
2022)
Q14784844768
Q2459451460-9
Q3502491500-9
Q4471469477-8
Full year1,9101,8951,914-19
Estimated sensitivities with current business scope
on annual level:
2023ChangeImpact in eurosImpact scope
Number of
working days
+/- 1 day+/- EUR
0.7-0.9 million
Topline and
bottom-line impact
Sickness
absences
+/-
1%-point
-/+ EUR
2 million
Topline and
bottom-line impact
SEK/EUR FX rate+/- 10%+/- EUR
4 million
Topline impact
BOARD OF DIRECTORS’ PROPOSAL
CONCERNING THE USE OF THE PARENT
COMPANY’S PROFIT
On 31 December 2023, the distributable funds of Sitowise Group
Plc amounted to EUR 108.2 million, of which profit of the parent
company for the 2023 financial period was EUR 4,014,150.
According to its dividend policy, Sitowise’s objective is to pay
annually a dividend corresponding to 30–50 percent of net
profit to its shareholders. When distributing a possible dividend,
business acquisitions, the company's financial situation, cash
flow and future growth opportunities are taken into account.
Considering the current market environment, and to preserve
capital for future growth initiatives, the Board of Directors
proposes that no dividend be paid based on the balance sheet to
be adopted for the financial year 2023. The Board will consider
using the authorization for share buy-backs during 2024.
LONG-TERM FINANCIAL TARGETS
The Board of Directors of Sitowise Group has set the following
long-term financial targets:
• Growth: Annual growth in net sales of more than 10 percent,
including acquisitions
• Profitability: Adjusted EBITA margin of at least 12 percent
• Leverage: Net debt / adjusted EBITDA should not exceed 2.5x,
except temporarily in conjunction with acquisitions
According to its dividend policy, Sitowise’s objective is to pay
annually a dividend corresponding to 30–50 percent of net
profit to its shareholders. When distributing a possible dividend,
business acquisitions, the company’s financial situation, cash flow
and future growth opportunities are taken into account.
OUTLOOK AND GUIDANCE
Outlook for 2024
The stable long-term growth in the demand for design, consulting
and digital services to create sustainable societies is supported
by megatrends such as urbanization, renovation backlog,
sustainability, digitalization and security.
The weakened macro-economic outlook, high interest rates
and high inflation have slowed down growth in both Finland
and Sweden and impacted the short-term decision-making of
Sitowise’s clients especially in the private sector and most of all in
residential building projects. The general economic environment
also has an impact on larger public sector investments. A key
factor impacting Sitowise’s market environment in 2024 will be
the timing of the anticipated central banks’ decisions to lower
interest rates, and whether those will be, when materialized,
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
28
sufficient to drive increasing demand for new construction and
investment projects and thereby technical consulting services.
We expect the market environment to remain mixed in 2024.
Key driver for growth will be increasing demand for services
related to green transition, security, and digitalization of the built
environment. In Buildings, the first part of the year will still be
challenging due to the difficult construction market in Finland,
which is expected to show signs of recovery earliest towards to
the end of 2024. There are some positive signals in the Swedish
technical consulting market environment, which has overall
remained more stable than in Finland.
Entering the year 2024, orderbooks were at good level in Infra,
Digital Solutions and Sweden. In Buildings, the workload was
on an insufficient level, which has led to a start of selective
temporary layoffs In Buildings in early 2024
In addition to the market development, cost inflation (e.g., relating
to salary increases), higher number of working days in 2024
than in the previous year (-1 day in Q1, +1 day in both Q2 and Q3
and equal number of days in Q4), potential currency fluctuations
(EUR/SEK) and higher interest expenses are expected to impact
Sitowise’s financial performance during 2024.
Guidance for 2024
Sitowise Group’s net sales is expected to slightly decline in 2024,
driven by the Buildings business decline. Adjusted EBITA margin
(%) is expected to be at the 2023 level or above in 2024.
SIGNIFICANT EVENTS AFTER THE
REPORTING PERIOD
Directed share issue and a change
in the number of Sitowise shares
On 9 January 2024, the Board of Directors of Sitowise Group Plc
decided on, by virtue of the authorization granted by the Annual
General Meeting on 25 April 2023, to issue 48,675 own shares
held by Sitowise Group Plc and 179,738 new shares in a directed
share issue. The directed share issue relates to a transaction
where Sitowise Oy acquired the expert operations of Ahlman
Group Oy, a provider of nature and environmental services. The
acquisition was completed on 9 January 2024.
The new shares subscribed for in the issue were registered with
the Finnish Trade Register on 11 January 2024, after which the
total number of shares in the Company is 35,845,665 shares. The
Company does not hold own shares.
Proposals of the Shareholders’ Nomination Board of Sitowise for
the Annual General Meeting 2024
On 30 January 2024, the proposals of the Shareholders'
Nomination Board for the Annual General Meeting were
published. The Annual General Meeting is planned to be held on
4 April 2024 and according to the proposal the members of the
Board of Directors and its committees will be paid the same fees
for the term of office ending at the Annual General Meeting 2025
as for their previous term of office.
The Shareholders' Nomination Board further proposes that for
the term of office ending at the Annual General Meeting 2025,
the current members of the company’s Board of Directors Eero
Heliövaara, Mirel Leino-Haltia, Elina Piispanen, Niklas Sörensen,
Tomi Terho and Mats Åström be re-elected and Anni Ronkainen
be elected as a new member to the Board of Directors.
Proposals in full are available on Sitowise’s investor site at Annual
General Meeting 2024 | Sitowise.
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
29
FINANCIAL AND ALTERNATIVE
PERFORMANCE MEASURES
Since the publication of the IFRS financial statements for 2019,
Sitowise has reported some alternative performance measures
that do not comply with IFRS standards. The calculation of
alternative performance measures does not take into account
items affecting comparability, which are different from ordinary
business operations, in order to show the financial result of
the underlying actual business. The alternative performance
measures are intended to improve comparability and are not a
substitute for other IFRS-based key figures.
The alternative performance measures to be reported are
adjusted EBITDA, EBITA, adjusted EBITA, and net debt / EBITDA
(adjusted). Adjusted EBITDA and adjusted EBITA exclude material
items that are not part of ordinary activities, but which affect
comparability.
Key figures describing financial development
EUR thousand1–12/20231–12/2022
Net sales210,910204,414
Growth in net sales, %3.2%14.0%
Adjusted organic growth in net sales, %1%5%
EBITA, adjusted17,01220,380
% of net sales8.1%10.0%
EBITA15,12816,075
Operating profit (EBIT)11,70113,162
% of net sales5.5%6.4%
Result for the period5,5497,914
Balance sheet total278,381280,724
Cash and cash equivalents15,59615,390
Net debt55,34056,602
Cash flow from operating activities before financial items and taxes23.89122.676
Earnings per share (EUR)0.160.22
Diluted earnings per share (EUR)0.160.22
Earnings per share, continuing operations (EUR)0.160.22
Diluted earnings per share, continuing operations (EUR)0.160.22
Return on equity (ROE), %4.7%6.8%
Return on capital employed (ROCE), %5.5%6.5%
Equity ratio, %42.9%41.6%
Net debt / EBITDA, adjusted3.0x2.6x
Gearing, %46.3%48.4%
Number of personnel, average2,2112,151
Full-time equivalent (FTE), average1,9741,918
Utilization rate74.4%76.1%
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
30
FORMULAS OF FINANCIAL AND ALTERNATIVE PERFORMANCE MEASURES
Adjusted organic growth in net sales=
Growth in net sales excluding acquisitions and divestments adjusted by the number of working days
and exchange rate impact
EBITA=Operating profit + amortization of intangible assets
EBITA, adjusted=EBITA + items affecting comparability
EBITDA, adjusted=
EBITDA + items affecting comparability; in addition, lease liabilities are treated as operating leases, so
lease expenses on the whole affect EBITDA
Items affecting comparability=
Items affecting comparability are primarily costs associated with M&A and integration, restructuring as
well as IPO readiness
Net debt=Loans from financial institutions - cash and cash equivalents (net debt does not include lease liabilities)
Return on equity (ROE), %=
Profit for the period, prev. 12 months
Total shareholders’ equity, average
Return on capital employed (ROCE), %=
(Profit before taxes + financial expenses), prev. 12 months
(Balance sheet total – non-interest-bearing debt), average
Equity ratio, %=
Total shareholders’ equity
Balance sheet total
Net debt / EBITDA, adjusted=
Net debt
EBITDA, adjusted, prev. 12 months
Gearing, %=
Net debt
Total shareholders’ equity
Non-diluted earnings per share=
(Result for the period – non-controlling interest – dividend for the financial period to be distributed
taking tax impact into consideration)
Average weighted number of shares
Diluted earnings per share=
(Result for the period – non-controlling interest – dividend for the financial period to be distributed
taking tax impact into consideration)
Average diluted weighted number of shares
Full-time equivalent (FTE), average=Group personnel, full-time equivalent average during the period
Utilization rate=Number of project hours worked relative to the number of hours worked
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
31
RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES
EUR thousand20232022
Net sales210,910204,414
Adjusted organic growth in net sales, %
Growth in net sales3%14%
Impact of acquisitions-5%-9%
Impact of number of working days1%0%
Impact of exchange rates2%1%
Adjusted organic growth in net sales, %1%5%
EBITA
Operating profit (EBIT)11,70113,162
Amortizations of intangible assets-3,427-2,913
EBITA15,12816,075
EBITA %7.2%7.9%
Items affecting comparability
Restructuring costs1,503722
M&A and integration costs3022,801
Other, income (-) / costs (+)-99782
Items affecting comparability, EBITDA1,7064,305
Items affecting comparability, depreciations1780
Items affecting comparability, EBITA1,8844,305
EBITA, adjusted
EBITA15,12816,075
Items affecting comparability, EBITA1,8844,305
EBITA, adjusted17,01220,380
EBITA, adjusted %8.1%10.0%
EBITDA
Operating profit (EBIT)11,70113,162
Depreciation and amortization-11,518-10,594
EBITDA23,21923,756
EBITDA %11.0%11.6%
Net debt
Loans from financial institutions70,93571,992
Cash and cash equivalents15,59615,390
Net debt55,34056,602
EBITDA, adjusted (prev. 12 months)
EBITDA (prev. 12 months)23,21923,756
Items affecting comparability, EBITDA (prev. 12 months)1,7064,305
Operational lease liabilities (IFRS16) (prev. 12 months)-6,735-6,366
EBITDA, adjusted (prev. 12 months)18,18921,695
Net debt / EBITDA, adjusted
Net debt55,34056,602
EBITDA, adjusted (prev. 12 months)18,18921,695
Net debt / EBITDA, adjusted3.0x2.6x
Gearing, %
Total shareholders’ equity 119,483116,874
Net debt55,34056,602
Gearing, %46.3%48.4%
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
32
CONSOLIDATED FINANCIAL STATEMENTS IFRS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR thousandNoteJan 1 – Dec 31, 2023Jan 1 – Dec 31, 2022
Net sales2.2210,910 204,414
Other operating income2.3397 288
Materials and services2.4-21,493 -20,495
Personnel expenses2.5-138,417 -129,774
Other operating expenses2.6-28,179 -30,677
Depreciation, amortization, and impairment2.7-11,518 -10,594
Operating result11,701 13,162
Financial income4.1532 390
Financial expenses4.1-5,088 -3,272
Profit before taxes7,145 10,280
Income taxes6.2-1,596 -2,366
Profit for the period5,549 7,914
Attributable to:
Owners of the parent5,618 7,847
Non-controlling interest-69 67
Profit for the period5,549 7,914
Items that may be reclassified to profit or loss
Change in translation difference162 -3,837
Cash flow hedging, net of tax-54 63
Total for items in other comprehensive income109 -3,774
Total comprehensive income5,657 4,140
Comprehensive income attributable to:
Owners of the parent5,727 4,073
Non-controlling interest-69 67
Earnings per share:
Earnings per share (EUR)2.80.16 0.22
Diluted earnings per share (EUR)0.16 0.22
The notes are an integral part of the financial statements.
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR thousandNoteDec 31, 2023Dec 31, 2022
Assets
Goodwill3.2158,033 157,620
Intangible assets3.211,863 10,224
Property, plant and equipment3.32,896 3,973
Right-of-use assets3.326,405 27,803
Other shares, similar rights of ownership, and receivables4.21,899 1,931
Deferred tax assets6.2732 894
Total non-current assets201,828 202,446
Trade and other receivables3.459,150 61,564
Income tax receivables6.21,808 1,323
Cash and cash equivalents4.215,596 15,390
Total current assets76,553 78,278
Total assets278,381 280,724
EUR thousandNoteDec 31, 2023Dec 31, 2022
Shareholders’ equity and liabilities
Share capital80 80
Reserve for invested unrestricted equity96,692 96,434
Fair value reserve294 348
Translation difference-3,519 -3,681
Retained earnings25,751 23,440
Equity attributable to owners of the parent119,299 116,621
Non-controlling interest183 253
Total shareholders’ equity119,483 116,874
Deferred tax liabilities6.21,543 1,588
Financial liabilities4.269,935 70,992
Lease liabilities4.220,524 22,050
Total non-current liabilities92,003 94,630
Income tax liabilities60 653
Financial liabilities4.21,000 1,000
Lease liabilities4.27,193 6,937
Provisions3.5330 981
Trade payable and other liabilities3.658,312 59,649
Total current liabilities66,895 69,219
Total shareholders’ equity and liabilities278,381 280,724
The notes are an integral part of the financial statements.
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SITOWISE GROUP PLC
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CONSOLIDATED CASH FLOW STATEMENT
EUR thousandJan 1 – Dec 31, 2023Jan 1 – Dec 31, 2022
Cash flow from operating activities:
Profit for the period5,549 7,914
Adjustments
Income taxes1,596 2,366
Depreciation, amortization, and impairment11,518 10,594
Financial income and expenses4,556 2,882
Other adjustments259 297
Change in working capital
Increase (-) / decrease (+) in trade receivables and other receivables2,835 -6,424
Increase (+) / decrease (-) in trade and other payables-2,422 5,047
Interest paid and other financial expenses-4,885 -2,244
Interest received and other financial income500 185
Income taxes paid-2,921 -4,558
Net cash flows from operating activities16,586 16,058
Cash flow from investing activities:
Investment in tangible and intangible assets
-3,904 -3,665
Acquisitions of subsidiaries, net of cash acquired-1,512 -28,786
Cash flow from investing activities
-5,416 -32,450
Cash flow from financing activities:
Payments from share issue258 3,844
Share repurchase0 -2,720
Dividends paid-3,555 -3,545
Withdrawal of long term loans0 24,424
Repayment of short term loans-1,072 -2,974
Payments of lease liabilities-6,561 -6,131
Cash flow from financing-10,929 12,899
Cash and cash equivalents at the start of the period15,390 19,353
Change in cash and cash equivalents, increase (+) / decrease (-)241 -3,493
Impact of changes in foreign exchange rates-35 -470
Cash and cash equivalents at the end of the period15,596 15,390
The notes are an integral part of the financial statements.
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
35
STATEMENT OF CHANGES IN CONSOLIDATED EQUITY
Equity attributable to owners of parent
EUR thousand
Share
capital
Reserve for
invested
unrestricted
equity
Fair value
reserve
Translation
differences
Retained
earningsTotal
Non-
controlling
interest
Total
shareholders’
equity
Shareholders’ equity
1 Jan 2023
Result for the period5,618 5,618 -69 5,549
Other comprehensive
income
-54 162 109 109
Total comprehensive
income
Share issues258 258 258
Dividend distribution-3,555 -3,555 -3,555
Share-based incentive
schemes
Transactions with
owners
Shareholders’ equity
31 Dec 2023
Shareholders’ equity
1 Jan 2022
Result for the period7,847 7,847 67 7,914
Other comprehensive
income
Total comprehensive
income
Share issues3,844 3,844 3,844
Share repurchase-2,720 -2,720 -2,720
Dividend distribution-3,545 -3,545 -3,545
Share-based incentive
schemes
Transactions with
owners
Shareholders’ equity
31 Dec 2022
The notes are an integral part of the financial statements.
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SITOWISE GROUP PLC
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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
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PARENT COMPANY'S FINANCIAL STATEMENTS
SITOWISE GROUP PLC INCOME STATEMENT (FAS)
EURNoteJan 1 – Dec 31, 2023Jan 1 – Dec 31, 2022
Net sales11,952,399.001,533,141.72
Other operating income20.0067,122.45
Personnel expenses3-1,256,185.00-1,360,293.04
Depreciation, amortization, and impairment4-932,298.96-940,636.87
Other operating expenses5-722,865.00-1,441,895.80
Operating profit/loss-958,949.96-2,142,561.54
Financial income and expenses6946,936.00-734,748.30
Profit/loss before appropriations and taxes-12,013.96-2,877,309.84
Group contributions74,030,000.002,884,000.00
Income taxes8-3,835.94-181.94
Profit for the period4,014,150.106,508.22
SITOWISE GROUP PLC BALANCE SHEET (FAS)
EUR
AssetsNoteDec 31, 2023Dec 31, 2022
Non-current assets
Intangible assets92,097,673.003,029,971.52
Holdings in Group companies10161,508,170.00161,516,353.52
Other shares and participations10305,500.00305,500.00
Other debtors11925,729.00995,056.92
Non-current assets total164,837,072.00165,846,881.96
Current assets
Long-term receivables1212,500,000.0019,000,000.00
Short-term receivables135,543,433.003,888,749.59
Cash and cash equivalents9,972,951.006,537,609.51
Current assets total28,016,384.0029,426,359.10
Assets total192,853,456.00195,273,241.06
EUR
Shareholders’ equity and liabilities
Shareholders’ equity14
Share capital80,000.0080,000.00
Reserve for invested unrestricted equity98,741,854.0098,483,862.37
Fair value reserve 9,229.0078,556.92
Retained earnings5,401,764.008,949,908.28
Profit (loss) for the period4,014,150.006,508.22
Total shareholders’ equity108,246,997.00107,598,835.79
Liabilities15
Non-current liabilities70,000,000.0071,000,000.00
Current liabilities14,606,459.0016,674,405.27
Liabilities total84,606,459.0087,674.405.27
Shareholders’ equity and liabilities total192,853,456.00195,273,241.06
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SITOWISE GROUP PLC
64
SITOWISE GROUP PLC: CASH FLOW STATEMENT (FAS)
EURJan 1 – Dec 31, 2023Jan 1 – Dec 31, 2022
Cash flow from operating activities
Operating profit-958,950.62-2,142,561.54
Adjustments to operating profit932,298.96873,514.42
Change in working capital4,999,200.17-12,593,442.43
Dividends received and other financial income 4,671,566.86192,865.57
Interest paid and other financial expenses-4,411,146.04-1,281,763.97
Taxes paid-102,619.85314,276.90
Cash flow from operating activities 5,130,349.48-14,637,111.05
Cash flow from investing activities
Purchase of shares in subsidiaries and associated companies-282,347.47-9,435,059.09
Cash flow from investing activities -282,347.47-9,435,059.09
Cash flow from financing
Share issue for consideration257,992.103,844,237.00
Share repurchase0.00-2,720,089.51
Dividends paid-3,554,652.80-3,544,656.98
Withdrawal of loans0.0022,500,000.00
Repayment of loans-1,000,000.00-1,000,000.00
Received group contribution2,884,000.000
Cash flow from financing-1,412,660.7019,079,490.51
Cash received in mergers0.00134,231.53
Change in cash and cash equivalents3,435,341.31-4,992,679.63
Cash and cash equivalents January 16,537,609.5111,530,288.82
Cash and cash equivalents December 319,972,950.826,537,609.51
SITOWISE GROUP PLC
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SITOWISE GROUP PLC: NOTES TO THE FINANCIAL STATEMENTS (FAS)
The Parent Company financial statements are prepared in
accordance with the Finnish Accounting Standards (FAS).
Copies of Sitowise Group's consolidated financial statements
are available at Linnoitustie 6, FI-02600 Espoo, Finland.
1 NET SALES
EUR20232022
Net sales1,952,3991,533,142
Total1,952,3991,533,142
Sitowise Group Plc's net sales consist of management fees
charged to other group companies.
2 OTHER OPERATING INCOME
EUR20232022
Merger profit067,122
Total067,122
3 PERSONNEL EXPENSES
EUR20232022
Wages and salaries1,099,0491,185,820
Pension expenses138,439152,770
Other social security expenses18,69721,703
Total1,256,1851,360,293
Management remuneration
EUR20232022
Board of Directors299,550292,200
CEO488,040411,573
Total (basis of payment)787,590703,773
More detailed information on the terms and conditions of the
CEO's contract can be found in Note 6.3.3 to the consolidated
financial statements.
The average number of personnel in the financial period was 3
(3). At the end of the financial period, the number of personnel
was 3 (3).
4 DEPRECIATION, AMORTIZATION, AND
IMPAIRMENT ACCORDING TO PLAN
EUR20232022
Intangible rights02,462
Other long-term expenses932,299938,174
Total932,299940,637
5 AUDIT FEES
EUR20232022
Audit firm KPMG Oy Ab
Statutory audit35,79536,144
Tax advice and consulting8,990250,283
Total44,785286,427
6 FINANCIAL INCOME AND EXPENSES
EUR20232022
Interest income
From Group companies886,500280,837
From others254,95973,842
Dividend income from Group companies4,051,6560
Other financial income207,608280,118
Total5,400,723634,798
Interest expenses
To Group companies-287,338-79,858
To others-3,657,530-1,097,182
Other financial expenses-508,918-192,506
Total-4,453,786-1,369,546
Financial income and expenses total946,936-734,748
7 APPROPRIATIONS
EUR20232022
Group contributions received4,030,0002,884,000
Total4,030,0002,884,000
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SITOWISE GROUP PLC
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8 DIRECT TAXES
EUR20232022
Income taxes on ordinary activities for
the financial period
-3,8360
Income taxes for the previous financial
period
0
-182
Total-3,836-182
9 INTANGIBLE ASSETS
EUR20232022
Acquisition cost January 14,669,8334,669,833
Acquisition cost December 314,669,8334,669,833
Accumulated depreciation, amortization,
and impairment January 1
-1,639,861-699,224
Depreciation-932,299-940,637
Accumulated depreciation, amortization,
and impairment December 31
-2,572,160-1,639,861
Balance sheet value December 312,097,6733,029,972
9.1 MEASUREMENT OF FIXED ASSETS
Fixed assets are capitalized at direct acquisition cost. With regard
to machinery and equipment, the depreciation plan used is the
straight-line method of depreciation based on the economic
useful life:
• IT machinery and equipment 4 years
• Other machinery and equipment 5 years
Straight-line depreciation based on economic useful life is used
for intangible rights and long-term expenses, with the following
planned depreciation periods:
• Intangible rights 3–5 years
• Goodwill 10 years
• Long-term expenses 5–10 years
• Development expenses 5 years
10 INVESTMENTS
EUR20232022
Holdings in Group companies
Acquisition cost January 1161,516,354110,953,081
Increase050,563,272
Decrease-8,1840
Acquisition cost December 31161,508,170161,516,354
Holding20232022
Sitowise Oy100%100%
Infracontrol AB100%100%
Infracontrol Espana SL100%100%
Infracontrol Portugal Lda100%100%
Infracontrol Denmark ApS100%100%
Sitowise Sverige AB
(Byggnadstekniska Byrån AB)
100% 100%
(1
Mavacon Mark & VA Consult AB100%100%
(2
E60 Elkonsult AB100%100%
(3
Convia Ingenjörsbyrå AB100%100%
(4
Convia Infrastructure AB49%49%
(5
(1
Company changed its name on November 3, 2022
(2
Company merged with Sitowise Sverige AB on 9 October 2023
(3
Company merged with Sitowise Sverige AB on 6 October 2023
(4
Company merged with Sitowise Sverige AB on 9 October 2023
(5
Company merged with Convia Ingenjörsbyrå AB 6 October 2023
EUR20232022
Other shares and participations
Acquisition cost January 1305,500305,500
Acquisition cost December 31305,500305,500
10.1 MEASUREMENT OF INVESTMENTS
Investments are measured at acquisition cost or at cost less
accumulated impairment, if the recoverable amount is expected to
be permanently lower than the acquisition cost.
11 OTHER DEBTORS
EUR20232022
Other debtors
Subordinated loans916,500916,500
Fair value of the derivative9,22978,557
Total925,729995,057
11.1 SUBORDINATED LOANS
Sitowise Group Plc has given subordinated loans to its related
party company Fimpec Group Oy. The loans amounted to EUR
916,500 at the end of the financial period. The interest rate on
the subordinated loans is 8% p.a. The loans are subject to the
provisions of chapter 12 of the Finnish Limited Liability Companies
Act.
SITOWISE GROUP PLC
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67
12 LONG-TERM RECEIVABLES
EUR20232022
Long-term loan receivables from Group
companies
12,500,00019,000,000
Total12,500,00019,000,000
13 SHORT-TERM RECEIVABLES
EUR20232022
Other accrued receivables245,167438,096
Accrued receivables from Group
companies
5,298,2663,450,653
Total5,543,4333,888,750
14 SHAREHOLDERS’ EQUITY
EUR20232022
Share capital at the beginning of the
financial period
80,00080,000
Share capital at the end of the financial
period
80,00080,000
Reserve for invested unrestricted equity
at the beginning of the financial period
98,483,86297,359,715
Increase257,9923,844,237
Decrease0-2,720,090
Reserve for invested unrestricted
equity at the end of the financial period
98,741,85498,483,862
Fair value reserve at the beginning of the
financial period
78,5570
Increase078,557
Decrease-69,3280
Fair value reserve at the end of the
financial period
9,22978,557
Retained earnings at the beginning of
the financial period
8,956,41712,494,567
Distribution of dividends-3,554,653-3,544,659
5,401,7648,949,908
Profit for the period4,014,1506,508
Total shareholders’ equity108,246,997107,598,836
Calculation of distributable funds
EUR20232022
Reserve for invested unrestricted equity
98,741,854
98,483,862
Retained earnings 5,401,7648,949,908
Profit/loss for the period4,014,1506,508
Total distributable funds108,157,768107,440,279
15 LIABILITIES
EUR
Non-current liabilities20232022
Loans from financial institutions71,000,00072,000,000
Transfer to short-term loans-1,000,000-1,000,000
Total70,000,00071,000,000
EUR
Current liabilities20232022
Repayment instalments of long-term
loans
1,000,0001,000,000
Accounts payable59,016224,035
Interest debt34,2099,888
Corporate tax accrual3,836305,620
Earn-out liabilities630,8581,048,212
Other current liabilities Group12,564,00313,621,547
Other accrued expenses314,537465,104
Total14,606,45916,674,405
16 GUARANTEES AND CONTINGENT
LIABILITIES
Assets pledged and off-balance sheet commitments and
arrangements on behalf of own and Group companies’ obligations
EUR20232022
Leasing agreements
To be paid in the next financial period 23,59522,888
To be paid later25,77917,814
Total 49,37440,703
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SITOWISE GROUP PLC
68
SIGNATURES OFTHE BOARD OF DIRECTORS AND
AUDITOR’S NOTE
Auditor’s note
A report on the audit has been issued today.
Helsinki, February 26, 2024
KPMG Oy Ab
Kim Järvi
Authorized Public Accountant (KHT)
BOARD OF DIRECTORS’ PROPOSAL FOR THE DISTRIBUTION OF PROFIT
The parent company's profit for the financial period is EUR 4,014,150 and the company's distributable funds total
EUR 108,157,768. The Board of Directors proposes to the Annual General Meeting that no dividend is distributed
and that the distributable funds are retained in unrestricted equity.
SIGNATURES TO THE FINANCIAL STATEMENTS AND BOARD OF DIRECTORS’ REPORT
Espoo, February 26, 2024
Eero Heliövaara
Chair of the Board
Heikki Haasmaa
CEO
Taina KyllönenMirel Leino-Haltia
Elina Piispanen Petri Rignell
Niklas SörensenTomi Terho
Mats Åström
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
69
Auditing
AUDITOR’S REPORT
To the Annual General Meeting of Sitowise Group Plc
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Sitowise Group
Plc (2767842-8) for the year ended 31 December 2023. The
financial statements comprise the consolidated statement of
financial position, statement of comprehensive income, statement
of changes in equity, cash flow statement and notes, including
material accounting policy information, as well as the parent
company’s balance sheet, profit and loss account, cash flow
statement and notes.
In our opinion
• the consolidated financial statements give a true and fair view
of the group’s financial position, financial performance and
cash flows in accordance with IFRS Accounting Standards as
adopted by the EU
• the financial statements give a true and fair view of the parent
company’s financial performance and financial position in
accordance with the laws and regulations governing the
preparation of financial statements in Finland and comply with
statutory requirements.
Our opinion is consistent with the additional report submitted to
the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing
practice in Finland. Our responsibilities under good auditing
practice are further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of our report.
We are independent of the parent company and of the group
companies in accordance with the ethical requirements that are
applicable in Finland and are relevant to our audit, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements.
In our best knowledge and understanding, the non-audit
services that we have provided to the parent company and group
companies are in compliance with laws and regulations applicable
in Finland regarding these services, and we have not provided
any prohibited non-audit services referred to in Article 5(1) of
regulation (EU) 537/2014. The non-audit services that we have
provided have been disclosed in note 2.6.1 to the consolidated
financial statements.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Materiality
The scope of our audit was influenced by our application
of materiality. The materiality is determined based on our
professional judgement and is used to determine the nature,
timing and extent of our audit procedures and to evaluate the
effect of identified misstatements on the financial statements as a
whole. The level of materiality we set is based on our assessment
of the magnitude of misstatements that, individually or in
aggregate, could reasonably be expected to have influence on
the economic decisions of the users of the financial statements.
We have also taken into account misstatements and/or possible
misstatements that in our opinion are material for qualitative
reasons for the users of the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed
in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. The significant risks of material
misstatement referred to in the EU Regulation No 537/2014 point
(c) ofArticle 10(2) are included in the description of key audit
matters below.
We have also addressed the risk of management override of
internal controls. This includes consideration of whether there
was evidence of management bias that represented a risk of
material misstatement due to fraud.
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SITOWISE GROUP PLC
70
Responsibilities of the Board of Directors and
the Managing Director for the Financial Statements
The Board of Directors and the Managing Director are responsible
for the preparation of consolidated financial statements that
give a true and fair view in accordance with IFRS Accounting
Standards as adopted by the EU, and of financial statements
that give a true and fair view in accordance with the laws and
regulations governing the preparation of financial statements
in Finland and comply with statutory requirements. The Board
of Directors and the Managing Director are also responsible for
such internal control as they determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors
and the Managing Director are responsible for assessing the
parent company’s and the group’s ability to continue as a going
concern, disclosing, as applicable, matters relating to going
concern and using the going concern basis of accounting. The
financial statements are prepared using the going concern basis
of accounting unless there is an intention to liquidate the parent
company or the group or cease operations, or there is no realistic
alternative but to do so.
Auditor’s Responsibilities for the
Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with good auditing practice will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of the financial statements.
As part of an audit in accordance with good auditing practice,
we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery,
THE KEY AUDIT MATTERHOW THE MATTER WAS ADDRESSED IN THE AUDIT
Net sales (Accounting principles and note 2.2 to the consolidated financial statements)
Revenues arise from provision of services to customers in accordance
with customer contracts, with the total net sales of EUR 211 million.
The 5-step model is applied to revenue recognition, which identifies the
contract and performance obligations, determines the transaction price
and allocates it to the performance obligations. Revenue is recognized as
the performance obligation is satisfied and only in an amount that reflects
the consideration to which the Group expects to be entitled in exchange
for the services provided to the customer.
Revenue reporting involves the risk of inappropriate timing or amount of
revenue recognition due to management estimates and the large number
of invoicing transactions.
We evaluated the company’s revenue recognition and accounting
policies by reference to the principles of revenue recognition determined
under IFRS.
We tested the effectiveness of key internal controls in place over the
completeness and accuracy of revenue. We also assessed the operative
effectiveness of relevant IT systems for financial reporting purposes.
We compared total revenue estimates to customer contracts for
projects where revenue is recognized over time based on the project’s
percentage of completion. In addition, we have analyzed estimated and
actual project costs as well as project margins. We also considered the
appropriateness of the process for updating estimated project costs and
percentages of completion.
In addition, we performed substantive audit procedures to evaluate the
completeness and accuracy of revenue recorded.
Valuation of goodwill (Accounting principles and note 3.2 to the consolidated financial statements)
Goodwill of EUR 158 million represents a significant part, 57%, of the
consolidated balance sheet total.
Goodwill is tested for impairment annually and whenever there is any
indication that the goodwill may be impaired. If any such indication
exists, the recoverable amount of the asset is estimated. The recoverable
amount is determined based on value in use. The preparation of goodwill
impairment testing requires estimates be made about the future.
Management estimates and associated critical uncertainties relate to the
components of the calculation of recoverable amount, which include the
discount rate, terminal growth rate, and the development of net sales and
operating profit, including cost levels for the company.
Due to the significance of the carrying amount and significant
management judgments involved in the forecasts, valuation of goodwill is
considered a key audit matter.
We critically analyzed the management's assumptions that form the
basis on which the cash flow projections for future years are prepared.
We assessed the appropriateness of the discount rate used and the
technical integrity of calculations as well as for comparison of the
assumptions used to the market and industry-specific data.
In addition, we assessed the adequacy of the sensitivity analyses and
the appropriate presentation of notes related to impairment tests in the
consolidated financial statements.
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
71
intentional omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the parent company’s or the
group’s internal control.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of the Board of Directors’
and the Managing Director’s use of the going concern basis of
accounting and based on the audit evidence obtained, whether
a material uncertainty exists related to events or conditions
that may cast significant doubt on the parent company’s or the
group’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in
the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the parent
company or the group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions
and events so that the financial statements give a true and fair
view.
• Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
the group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision
and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements
regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the Annual General
Meeting in 2018, and our appointment represents a total period of
uninterrupted engagement of 6 years.
Sitowise Group Plc has been a public interest entity since 25
March 2021.
Other Information
The Board of Directors and the Managing Director are responsible
for the other information. The other information comprises the
report of the Board of Directors and the information included in
the Annual Report, but does not include the financial statements
and our auditor’s report thereon. We have obtained the report of
the Board of Directors prior to the date of this auditor’s report, and
the Annual Report is expected to be made available to us after
that date. Our opinion on the financial statements does not cover
the other information.
In connection with our audit of the financial statements, our
responsibility is to read the other information identified above
and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be
materially misstated. With respect to the report of the Board of
Directors, our responsibility also includes considering whether the
report of the Board of Directors has been prepared in accordance
with the applicable laws and regulations.
In our opinion, the information in the report of the Board of
Directors is consistent with the information in the financial
statements and the report of the Board of Directors has been
prepared in accordance with the applicable laws and regulations.
If, based on the work we have performed on the other information
that we obtained prior to the date of this auditor’s report, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing
to report in this regard.
Helsinki, 26 February 2024
KPMG OY AB
KIM JÄRVI
Authorised Public Accountant, KHT
Board of Directors’ Report and Consolidated Financial Statements 2023
SITOWISE GROUP PLC
72
INDEPENDENT AUDITOR’S REASONABLE ASSURANCE REPORT ON SITOWISE GROUP PLC’S
ESEF FINANCIAL STATEMENTS
To the Board of Directors of Sitowise Group Plc
We have undertaken a reasonable assurance engagement in
respect of whether the consolidated financial statements for the
year ended 31 December, 2023 included in the digital financial
statements 743700HOHMOHAANHFF73-2023-12-31-en.zip of
Sitowise Group Plc (Business ID 2767842-8) have been marked
up with iXBRL markups in accordance with the requirements of
Article 4 of EU Delegated Regulation 2018/815 (ESEF RTS).
The Responsibility of the Board of Directors
and Managing Director
The Board of Directors and Managing Director are responsible
for preparing the report of the Board of Directors and financial
statements (ESEF financial statements) that comply with the
requirements of ESEF RTS. This responsibility includes:
• preparation of ESEF financial statements in XHTML format in
accordance with Article 3 of the ESEF RTS
• marking up the primary statements and the notes to
the consolidated financial statements, and the company
identification data included in the ESEF financial statements
with iXBRL tags in accordance with Article 4 of the ESEF RTS;
and
• ensuring consistency between ESEF financial statements and
audited financial statements.
The Board of Directors and the Managing Director are also
responsible for such internal control as they deem necessary to
prepare the ESEF financial statements in accordance with the
requirements of the ESEF RTS.
Auditor’s Independence and Quality Management
We are independent of the company in accordance with the
ethical requirements applicable in Finland, which apply to the
engagement we have performed, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
The auditor applies International Standard on Quality
Management ISQM 1, which requires the firm to design,
implement and operate a system of quality management
including policies or procedures regarding compliance with ethical
requirements, professional standards and applicable legal and
regulations requirements.
Auditor’s Responsibility
In accordance with the Engagement Letter our responsibility
is to express an opinion on whether the marking up of the
consolidated financial statements included in the ESEF financial
statements comply in all material respects with the Article 4 of the
ESEF RTS. We conducted our reasonable assurance engagement
in accordance with International Standard on Assurance
Engagements 3000.
The engagement involves procedures to obtain evidence
whether;
• the primary statements of the consolidated financial
statements included in the ESEF financial statements are, in
all material respects, marked up with iXBRL tags in accordance
with Article 4 of the ESEF RTS, and;
• whether the notes to the consolidated financial statements
and the company identification data included in the ESEF
financial statements data, have been marked up, in all material
respects, with iXBRL tags in accordance with Article 4 of the
ESEF RTS; and
• whether the ESEF financial statements and the audited
financial statements are consistent with each other.
The nature, timing and the extent of procedures selected depend
on practitioner’s judgement. This includes the assessment of the
risks of material departures from the requirements set out in the
ESEF RTS, whether due to fraud or error.
We believe that the evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Opinion
In our opinion, the primary statements of the consolidated
financial statements, the notes to the consolidated financial
statements and the company identification data included in the
ESEF financial statements of Sitowise Group Plc identified as
743700HOHMOHAANHFF73-2023-12-31-en.zip for the year
ended 31 December, 2023 are, in all material respects, marked up
in compliance with the ESEF Regulatory Technical Standard.
Our audit opinion on the audit of the consolidated financial
statements of Sitowise Plc for the year ended 31 December, 2023
is set out in our Auditor’s Report dated 26 February, 2024. In this
report, we do not express any audit opinion or other assurance
conclusion on the consolidated financial statements.
Helsinki 12 March, 2024
KPMG OY AB
Kim Järvi
Authorised Public Accountant, KHT
SITOWISE GROUP PLC
Board of Directors’ Report and Consolidated Financial Statements 2023
73
SITOWISE GROUP PLC
LINNOITUSTIE 6 D, FI-02600 ESPOO, FINLAND
PHONE +358 20 747 6000
WWW.SITOWISE.COM
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