*Student coverage Q&A part 2
We’ve received two questions that I will answer here so the information is again equally available for all teams and investors:
Q: Can you open roadmap regarding Denmark? What goals you haven in Denmark during this strategy period? Voisitko avata askelmerkkejä Tanskan suhteen? Mitä tavoitteita nykyisellä strategiakaudella pyritään saavuttamaan Tanskassa?
A: HCA partnership is strategically our access to the Danish market. HCA has strong local presence, great local team, customer access and active sales force towards the whole listed company ecosystem in Denmark. They have their own products and advisory services, but on top of that they resell our products and related services to local customers (IR web, press release system, agm, commissioned research, teleconferences). In a nutshell: they have the local team close to clients, we have the platform, tools and technology needed to run the operations and gain competitive edge. Strategically, we together aim to establish a strong position in the Danish IR product market with HCA during the upcoming years.
As we need to test different go-to-market strategies to new countries, this partnership is also a pilot to how different partner models could work as a go-to-market tactic for Inderes.
Q: How is revenue recognized from Denmark operation? What is the role of HCA and Inderes? Is there difference between sales of HCA or Inderes products? (Miten liikevaihto kirjautuu Tanskan liiketoiminnasta? Mikä on Inderesin ja mikä HCA:n rooli? Onko eroa siinä, myydäänkö Inderesin oma tuote vai HCA:n tuote? )
A: The partnership is based on fixed platform fee and on top of that we have a revenue share model on sales of products that apply Inderes technology. We have piloted successfully all our main products together with local clients, but it is still small volumes and mainly pilots so commercially the revenue share part is not significant, as we have communicated. If HCA grows in products outside Inderes’ scope, such as advisory, we benefit from that indirectly through our 20 % ownership. It is worth mentioning that Denmark is however a smaller IR market than Finland, and in many aspects not as mature as Finland.
Technical details, not significant but good to understand for background. As an associate company (osakkuusyhtiö) where we have control through two board seats, HCA’s net result is recognized under our financial income/cost -line. Also, the 20 % ownership investment is annually depreciated under FAS accounting and this item is also booked under financial costs. This has no impact on cash flow (unless HCA pays dividend) and our adjusted EPS is adjusted for this slightly weird FAS accounting item.