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TRAINERS’ HOUSE GROUP INTERIM REPORT 1 JANUARY – 31 MARCH

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TRAINERS’ HOUSE GROUP, STOCK EXCHANGE RELEASE, 27 APRIL 2023 at 8:30
          
January-March 2023 in brief

net sales EUR 2.8 million (EUR 2.7 million), change of 3.3 % compared to the corresponding period of the previous yearoperating result EUR 0.4 million (EUR 0.4 million), 14.5% of net sales (13.4%)cash flow from operations EUR 0.3 million (EUR 0.3 million)earnings per share EUR 0.19(EUR 0.17*)

*In the second quarter of 2022, the number of the company’s shares changed as a result of the reverse split and the related directed free share issue. The share-specific key figures in the release have been reported according to the number of shares on 31 March 2023 also for the comparison period.

Key figures at the end of first quarter of 2023

cash and cash equivalents EUR 2.5 million (EUR 3.5 million)interest-bearing liabilities of EUR 0.4 million (EUR 0.6 million) and interest-bearing net debt of EUR -2.1 million (EUR -2.9 million).equity ratio 59.5 % (54.7 %)

OUTLOOK FOR 2023

The company estimates the operating profit for 2023 to be between EUR -0,4 and 0.4 million.

CEO ARTO HEIMONEN

The result of the first quarter of the year was good. Especially the development of Training business was delightful.

We had more than two hundred customer calls on average per week. Many thanks to the employees.

There has been a significant change in the company’s results after the first quarter.

Due to the weakened market conditions for some time now, the outlook for the end of the year has decreased. It has become more difficult to acquire new assignments, which affects the turnover accumulated at the end of the year. At the same time, the profitability outlook of the Ignis business has fallen, because it takes more time to arrange the meetings that the company organizes for its customers compared to before. For the reasons mentioned above, the company reduced its profit outlook for the entire year 2023.

The company will initiate change negotiations in Trainers’ House Plc to reduce a maximum of seven people.

More work needs to be done to get new assignments. It is important that the number of customer encounters is kept high. Also, the importance of impact on people is emphasized.

Healthy cash flow and profitability are the most important goals of the company’s business in 2023 as well. In the current year, the company will take the necessary actions to improve growth and profitability in the coming years.

The purpose of Trainers’ House is to help people forward. This is possible by touching people, electrifying management and producing verifiable results.

Thank you to customers and all stakeholders.

More information:
Arto Heimonen, CEO, +358 404 123 456
Saku Keskitalo, CFO, +358 404 111 111

OPERATIONAL REVIEW

During the review period, the company focused on serving its customers.

The annual general meeting of Trainers’ House Plc was held on 29 March 2023 in Helsinki. The annual general meeting decided, in accordance with the board’s proposal, that the company will distribute a dividend of EUR 0.47 per each company share. The dividend will be paid in two installments so that EUR 0.26 will be paid on 26 April 2023 (dividend payment record date 19 April 2023) and EUR 0.21 will be paid on 21 December 2023 (dividend payment record date 14 December 2023).

The annual general meeting confirmed the number of the Board of Directors as five. Aarne Aktan, Jarmo Hyökyvaara, Elma Palsila and Jari Sarasvuo were re-elected as members, and Emilia Tauriainen as a new member to the Board of Directors. In the board meeting held after the annual general meeting, the Board of Directors elected Jari Sarasvuo as the chairperson of the board.

FINANCIAL PERFORMANCE

Net sales for the reporting period were EUR 2.8 million (EUR 2.7 million). Operating result was EUR 0.4 million, 14.5 % of net sales (EUR 0.4 million, 13.4 %). The result for the period was EUR 0.4 million, 15.1 % of net sales (EUR 0.4 million, 13.3 %).

The breakdown of the Group’s figures (unit thousand euros) is presented in the following table:

Group’s main figures (kEUR)1-3/20231-3/2022Net sales2 7762 687Other operating income06Expenses arising from employee benefits-1 585-1 580Other expenses-657-638EBITDA534475Depreciation and impairment losses-132-114EBIT 403361EBIT, % of net sales14.5 13.4 Financial income and expenses14-4Result before taxes417358Income taxes11Result of the period418358Result, % of net sales15.1 13.3

LONG-TERM OBJECTIVES

The company’s long-term goal is profitable growth.

FINANCING, INVESTMENTS AND SOLVENCY

Cash flow and key financing figures (unit million euros)1-3/20231-3/2022Cash flow from operations before financial items
0.30.3Cash flow from operations0.30.3Cash flow from investments0.00.0Cash flow from financing-0.1-0.1Total cash flow0.20.1    3/20233/2022Cash2.53.5Interest-bearing debt0.40.6Equity ratio %59.5 54.7

MAJOR RISKS AND UNCERTAINTIES

Trainers’ House’s business is sensitive to economic fluctuations.

The general economic situation internationally and in Finland contains significant risks. The war in Europe, the tense world political situation and the possible expansion of the crisis can cause rapid changes in the operating environment.

Changes in the openness of Europe, the freedom of world trade and the world political situation affect the exports of Finnish companies, which is reflected in the demand of the domestic market.

High inflation and the resulting increase in interest rates have a negative effect on economic activity.

The constant competition for the best employees affects recruitment and the commitment of key personnel.

The above-mentioned risks, when realized alone or together, have a significant impact on the company’s operations.

The company divides the risk factors affecting business, earnings, and market capitalization into five main categories: market and business risks, personnel-related risks, technology and information security risks, financial risks, and legal risks.

Trainers’ House has sought to hedge against the adverse effects of other risks with comprehensive insurance policies. These include statutory insurance, liability and property insurance and legal expenses insurance. Insurance coverage, insurance values and deductibles are reviewed annually together with the insurance company.

The Management Team reports to the Board on a monthly basis on key business-related risks and, where necessary, risk management measures.

The Group has the reporting systems required for effective business monitoring. Internal control is linked to the company’s vision, strategic goals and the business goals set on the basis of them.

The realization of business objectives and the Group’s financial development are monitored on a monthly basis through the Group’s corporate governance system. As an essential part of the control system, actual data and up-to-date forecasts are reviewed monthly by the Group Management Team. The control system includes, among other things, sales reporting, an income statement, a rolling revenue and profit forecast, and key figures that are important to operations.

Trainers’ House is an expert organization. The magnitude of market and business risks is difficult to determine. Typical risks in this area are related to, for example, general economic development, customer distribution, technology choices, the development of competition and the management of personnel costs.

Risks are managed through the planning and regular monitoring of sales, human resources, and operating expenses, which enables rapid action when circumstances change. The risks of trade receivables have been taken into account by the recognition of expenses based on the age of the receivables and individual risk analyzes.

The goal of Trainers’ House’s financial risk management is to secure the availability of equity and debt financing on competitive terms and to reduce the impact of adverse market movements on the company’s operations.

Financial risks are divided into four categories, which are liquidity, interest rate risks, currency risks and credit risks. Each risk is monitored separately. Liquidity and interest rate risks are reduced with sufficient cash resources and efficient collection of receivables. Currency risks are low as Trainers’ House operates primarily in the euro market. In financial risk management, the focus is on liquidity.

The success of Trainers’ House as an expert organization depends on its ability to attract and retain skilled staff. In addition to a competitive salary, personnel risks are managed through incentive schemes and investments in personnel training, career opportunities and general well-being.

Technology is a key part of Trainers’ House’s business. Technology risks include, but are not limited to, supplier risk, risks related to internal systems, challenges posed by technological change, and security risks. Risks are protected against long-term cooperation with technology suppliers, appropriate security systems, staff training and regular security audits.

Trainers’ House’s legal risks are mainly focused on the contractual relationship between the company and customers or service providers. At their most typical, they relate to delivery responsibility and the management of intellectual property rights. In order to manage the risks related to contracts and intellectual property rights, the company has internal guidelines for contractual procedures. In the company’s view, the contractual risks are not unusual.

At the end of the review period, goodwill and other intangible assets recognized in the balance sheet have been tested in the normal way. The test did not reveal any need for impairment.

The consolidated balance sheet of Trainers’ House has goodwill of EUR 2.1 million. The balance sheet value of other intangible assets is EUR 1.1 million. If the Group’s profitability does not develop as forecasted or other external factors independent of the Group’s operations, such as interest rates, change significantly, it is possible that goodwill and other intangible assets will have to be written off. Recognition of an impairment loss would have no effect on the Group’s cash flow.

Due to the project nature of the operations, the order backlog is short, and predictability is therefore challenging.

The description of potential risks is not comprehensive. Trainers’ House conducts continuous risk assessment in connection with its operations and strives to hedge against identified risks.

Investors have also been informed about the risks in the company’s annual review and on the website at www.trainershouse.fi.

PERSONNEL

At the end of the review period, the Group had 136 (114) employees. As before, the company reports the number of employees converted to full-time employees.

DECISIONS REACHED AT THE ANNUAL GENERAL MEETING

The annual general meeting of Trainers’ House Plc was held on 29 March 2023 in Helsinki.

The annual general meeting confirmed the financial statements and discharged CEO and the members of the Board of Directors from liability for the fiscal year 1 January – 31 December 2022.

The annual general meeting decided, in accordance with the board’s proposal, that the company will distribute a dividend of EUR 0.47 per each company share.  The dividend will be paid in two installments so that EUR 0.26 will be paid on 26 April 2023 (dividend payment record date 19 April 2023) and EUR 0.21 will be paid on 21 December 2023 (dividend payment record date 14 December 2023). The dividend is paid to the shareholder who is entered in the company’s shareholder register on the record date of the dividend payment.

Aarne Aktan, Jarmo Hyökyvaara, Elma Palsila and Jari Sarasvuo were re-elected as members, and Emilia Tauriainen as a new member to the Board of Directors. In the board meeting held after the annual general meeting, the Board of Directors elected Jari Sarasvuo as the chairperson of the board.

The annual general meeting decided that the board member’s remuneration shall be EUR 2,500 per month and the chairperson’s remuneration will be EUR 4,500 per month.

Ernst & Young Oy was re-elected as the company’s auditor. The remuneration to the auditor is paid according to the auditor’s reasonable invoice.

The annual general meeting decided on amending Article 12 of the Articles of Association so that the general meeting can be held without a physical meeting place as a remote meeting. A new paragraph will be added to Article 12 of the Articles of Association, which will read in its entirety as follows:

“The board can decide that the general meeting is held without a meeting place whereby the shareholders shall exercise their power of decision in full in real-time during the meeting using telecommunication connection and technical means (remote meeting).”

SHARES AND SHARE CAPITAL

The company’s share is listed on Nasdaq Helsinki Ltd under the name Trainers’ House Plc (TRH1V).

In the second quarter of 2022, the number of the company’s shares changed as a result of the reverse split and the directed free share issue. The change in the number of shares took place on 1 April 2022 after the end of trading, and trading in the new number of shares and the ISIN code began on 4 April 2022. The current number of shares of Trainers’ House is 2,147,826. The share-specific data for the comparison period have been adjusted due to the reverse split.

At the end of the reporting period, Trainers’ House Plc had 2,147,826 shares and a registered share capital of EUR 880,743.59. The company does not hold any of its own shares. There have been no changes in the share capital during the period.

Share performance and trading

During the period under review, a total of 83 thousand shares, or 3,9 % of the average number of all company shares (322 thousand shares, 15.0 %), were traded on Nasdaq Helsinki for a value of EUR 451 thousand (EUR 2.4 million). The period’s highest share quotation was EUR 5.82 (EUR 9.40), the lowest EUR 4.95 (EUR 6.60) and the closing price EUR 5.30 (EUR 9.20). The weighted average price was EUR 5.43 (EUR 7.57). At the closing price on 31 March 2023, the company’s market capitalization was EUR 11.4 million (EUR 19.8 million).

SUMMARY OF FINANCIAL STATEMENTS AND NOTES

The report has been prepared in accordance with IAS 34 standard. The report has been prepared in accordance with IFRS standards and interpretations that have been approved for application in the EU and are in force on 1 January 2023.

In this interim report Trainers’ House has followed the same accounting policies and calculation methods as in the 2022 annual financial statements.

The figures given in the interim report are unaudited.

INCOME STATEMENT IFRS (kEUR)1-3/20231-3/20221-12/2022NET SALES2 7762 6879 753Other operating income066Expenses:   Materials and services-114-110-484Personnel-related expenses-1 585-1 580-6 146Depreciation and impairment losses-132-114-491Other operating expenses-542-528-2 064Total expenses-2 373-2 332-9 185Operating result403361574Financial income and expenses14-4-15Result before taxes417358559Income taxes1122RESULT OF THE PERIOD418358581Result attributable to owners of the parent company418358581Earnings per share, EUR*0.190.170.27Earnings per share attributable to owners of the parent company, EUR*0.190.170.27

*In the second quarter of 2022, the number of the company’s shares changed as a result of the reverse split and the related directed free share issue. The share-specific key figures in the release have been reported according to the number of shares on 31 March 2023 also for the comparison period.

BALANCE SHEET IFRS (kEUR)3/20233/202212/2022ASSETS   Non-current assets   Tangible assets628807730Goodwill2 1292 1292 129Other intangible assets1 0671 1531 089Long-term receivables   Other receivables, long-term155106172Deferred tax receivables207200208Total long-term receivables362306380Total non-current assets4 1864 3954 328    Current assets   Account receivables and other receivables1 0631 1821 183Cash and cash equivalents2 4813 5132 247Total current assets3 5444 6953 430TOTAL ASSETS7 7309 0907 758    SHAREHOLDERS’ EQUITY AND LIABILITIES   Equity attributable to the owners of the parent company   Share capital881881881Distributable non-restricted equity fund373737Retained earnings3 1113 5403 540Result of the period418358581Total shareholders’ equity4 4474 8165 039Long-term liabilities   Deferred tax liabilities211227213Long-term financial liabilities81364180Total long-term liabilities291590394Short-term liabilities   Short-term financial liabilities348282337Accounts payable and other liabilities2 6433 4011 989Total short-term liabilities2 9913 6832 326Total liabilities3 2824 2742 719TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES7 7309 0907 758 CASH FLOW STATEMENT IFRS (kEUR)1-3/20231-3/20221-12/2022CASH FLOW FROM OPERATIONS   Result of the period418358581Adjustments 118116490Changes in working capital-205-174-74Cash flow from operations before financial items and taxes331300997Financial items and taxes paid-1-4-16CASH FLOW FROM OPERATIONS330296982CASH FLOW FROM INVESTMENTS   Investments in tangible and intangible assets-8-44-163Granted loans00-122Repayment of loan receivables2400Interests received1500CASH FLOW FROM INVESTMENTS31-44-285CASH FLOW FROM FINANCING   Repayment of lease liabilities-88-80-326Dividends paid*-38-38-1 503CASH FLOW FROM FINANCING-126-117-1 828TOTAL CASH FLOW234135-1 131CHANGE IN CASH AND CASH EQUIVALENTS   Opening balance of cash and cash equivalents2 2473 3783 378Closing balance of cash and cash equivalents2 4813 5132 247CHANGE IN CASH AND CASH EQUIVALENTS234135-1 131

* The comparative figures 3/2022 for dividends paid have been adjusted -38kEUR related to withholding taxes paid during 3/2022. The corresponding change is reflected in the change in working capital.

CHANGE IN SHAREHOLDERS’ EQUITY (kEUR)
Equity attributable to owners of the parent company

CHANGE IN SHAREHOLDERS’ EQUITY (kEUR)Share capitalDistributable non-restricted equity fundRetained earningsTotalEquity 1 January 2022881375 0435 961Other comprehensive income  358358Dividends  -1 503-1 503Equity 31 March 2022881373 8984 816     Equity 1 January 2023881374 1215 039Other comprehensive income  418418Dividends  -1 009-1 009Equity 31 March 2023881373 5294 447

RELATED PARTY TRANSACTIONS

During the period under review, Trainers’ House had transactions with Causa Prima Ltd, a company controlled by Jari Sarasvuo, the Chairperson of the Board of Directors, and Pro Vividus Ltd and Anorin Liekki Ltd, which are related to the company.

The following transactions took place with related parties:

RELATED PARTY TRANSACTIONS (kEUR)1-3/20231-3/20221-12/2022Purchases during the period5394245Liabilities at the end of the period04753 PERSONNEL1-3/20231-3/20221-12/2022Average number of personnel130114128Personnel at the end of the period136114131 COMMITMENTS AND CONTINGENT LIABILITIES3/20233/202212/2022Collaterals and contingent liabilities given for own commitments140136140 OTHER KEY FIGURES3/20233/202212/2022Equity ratio (%)59.554.768.9Shareholders’ equity/share (EUR)*2.072.242.35

*In the second quarter of 2022, the number of the company’s shares changed as a result of the reverse split and the related directed free share issue. The share-specific key figures in the release have been reported according to the number of shares on 31 March 2023 also for the comparison period.

Calculation formulas for key figures

Earnings per share        = Result of the period attributable to owners of the parent company
                                         Average number of shares
                                         adjusted for share issue in financial period

Interest-bearing net debt = Interest-bearing liabilities – cash and cash equivalents

Equity ratio (%)          = Equity x 100
                                      Balance sheet total – advances received

Equity / share            = Equity                                                      
                                     Number of shares adjusted for share issue at the
                                     end of financial period

Items affecting the calculation of key figures3/20233/202212/2022Advances received (kEUR)250283449Interest-bearing liabilities (kEUR)429646517Average number of shares adjusted for share issue in financial period (unit thousand shares)*2 1482 1482 148Number of shares adjusted for share issue at the end of the financial period (unit thousand shares)*2 1482 1482 148

*In the second quarter of 2022, the number of the company’s shares changed as a result of the reverse split and the related directed free share issue. The share-specific key figures in the release have been reported according to the number of shares on 31 March 2023 also for the comparison period.

In Helsinki 27 April 2023

TRAINERS’ HOUSE PLC

BOARD OF DIRECTORS

Information:
Arto Heimonen, CEO, +358 404 123 456
Saku Keskitalo, CFO, +358 404 111 111

DISTRIBUTION
Nasdaq Helsinki
Main media
www.trainershouse.fi – For investors

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