EFECTE PLC -- COMPANY ANNOUNCEMENT -- 7 March 2019 at 14.00

Efecte updates its strategy and long-term financial targets

Cloud software company Efecte updates its strategy to better match the current requirements of the market and to enable more focused strategy implementation actions. The company also updates the long-term financial targets.

The core of the strategy remains the same: Efecte focuses on cloud-based service management solutions.

Efecte's mission is changed from "simplifying the complex world of IT" to:

At Efecte, we love services and our mission is to perfect them.

The mission is further explained by:

We offer cloud-based service management software, Nordic at heart, and optimized for:

Behind the updated mission is the current world where everything is sold as a service, and where digitalization disrupts all industries, accelerated by technologies like machine learning and cloud.  "We see that the winning services are ones that deliver magical experiences, be it for the employees or the customers. With 20 years of history, Efecte as an organization, its people and culture have grown to love services. That is why we decided to take up the mission of perfecting services", says Efecte's CEO Niilo Fredrikson.

“Some 90% of the respondents in Efecte's customer satisfaction survey in late 2018 stated that it is important that Efecte is a European provider with development teams and data centers here.  For this reason, the European mid-sized businesses and public organizations are a natural sweet spot for us. We also want to continue emphasizing our European roots, which differentiates us from our global competitors”, Fredrikson continues.

Another topic clarified in the strategy is more focus on local and regional service providers as a customer segment. This group comprises e.g. IT service providers and business process outsourcing companies.

"Satisfied service provider customers, like Taitoa offering HR & financial services and Istekki providing IT services have proven us that, thanks to the versatility and flexibility of our solutions, they are well suited for this kind of players. For this reason, we wanted to promote them as a key target group in the strategy, next to mid-sized European businesses and public sector", says Fredrikson.

Efecte's vision was also renewed:

By 2022 Efecte will have industry-leading employee and customer satisfaction.  We also want to be the fastest growing European service management company, ranked by analysts as the number one European cloud solution in our field.

Efecte's strategic cornerstones on the road toward the vision are the following:

  1. We provide cloud-based service management software solutions that help our customers perfect any service they offer. This is realized via better agility, outstanding user experience and lower total cost of ownership (TCO) of our solution.
  2. We focus on mid-sized customers and local service providers.
  3. We expand internationally in Europe, as a European company.
  4. We focus on making our customers successful, and through that grow our SaaS business.

Our primary goals are to make our customers successful with Efecte and to grow of our SaaS business, measured by the monthly recurring revenue (MRR). The long-term financial targets have been clarified to be:

Efecte aims for over 20% annual organic growth of SaaS net sales on average in 2019 - 2022. Substantial investments in international growth and product development will decrease operating profit in the next few years, but the company aims for a double-digit operating profit percentage by the end of the strategy period.

"Our customers’ success in their own business is our first priority and all our actions aim for that", says Fredrikson. "We increasingly recognize our main competition in the service management field to be cloud solution providers. It is natural for us to use SaaS revenue as the financial measurement of our success in this competition", continues Fredrikson. "Although consulting services make a sizeable portion of our revenue, that’s not the primary business as such that we are in. We see our consulting services have an important role in helping our customers to succeed and to help us to grow our SaaS revenue. Traditional licenses and related maintenance have a decreasing role in our business, and it is natural to leave them outside our primary targets."

Further enquiries:

CEO Niilo Fredrikson, +358 50 356 7177
Chief Marketing & Strategy Officer Henriikka Åkerman, +358 50 554 1639

Certified Adviser:
Evli Bank Plc, tel +358 40 579 6210


Efecte Plc

Efecte is a Finnish software company offering cloud-based Service Management solutions and related supportive professional services. With Efecte’s software, organizations can flexibly manage all internal and external services, for example, an IT, HR or finance department’s services, customer service and access rights. Efecte is one of the leading software vendors in its field for medium-sized and public organizations in Finland and the Nordic countries. The company was established in 1998 and is listed on the Nasdaq First North Helsinki marketplace. Efecte operates in Finland, Sweden, Germany, and Denmark.

www.efecte.com