2014-02-13 11:30:00 CET
2014-02-13 11:30:03 CET
REGULATED INFORMATION
Affecto Oyj - Financial Statement Release
Affecto Plc's Financial Statements Bulletin 2013
Helsinki, 2014-02-13 11:30 CET (GLOBE NEWSWIRE) -- AFFECTO PLC -- FINANCIAL
STATEMENTS BULLETIN -- 13 FEBRUARY 2014 at 12.30
Affecto Plc's Financial Statements Bulletin 2013
Group key figures
MEUR 10-12/13 10-12/12 2013 2012
Net sales 36.2 38.3 132.9 133.4
Operational segment result 2.7 5.0 10.3 12.5
% of net sales 7.6 13.2 7.7 9.4
Operating profit 2.3 4.5 8.3 10.5
% of net sales 6.3 11.8 6.2 7.8
Profit before taxes 2.1 4.3 8.0 10.0
Profit for the period 1.4 3.3 5.6 7.6
Equity ratio, % 53.0 50.6 53.0 50.6
Net gearing, % 7.4 15.8 7.4 15.8
Earnings per share, eur 0.07 0.16 0.26 0.37
Earnings per share (diluted), eur 0.07 0.15 0.26 0.36
Equity per share, eur 3.14 3.24 3.14 3.24
Dividend proposal, eur/share 0.16 0.16
CEO Lars Wahlström comments:
Our fourth quarter performance was weaker than we originally expected. Our net
sales decreased by over 5% and operating profit clearly decreased from the
previous year. Net sales decreased in Denmark, Sweden and Norway. Finland and
Baltic achieved small growth. The mix of the net sales developed unevenly and
resource utilisation remained too low in some segments. Both the sales of own
consulting work and third-party licenses decreased somewhat.
Fourth quarter's profit decreased in all areas, especially in Norway and
Baltic. Denmark and Finland made good profit, but were below last year. Sweden
was slightly profitable making a second profitable quarter in a row, which is
great in the light of our past difficulties there. Baltic made a loss mainly
due to Lithuania.
Year 2013 started well, but under weak economic environment. Our performance
decreased toward the year-end as the general economy continued being weak and
affecting customers' investments. Net sales in whole year 2013 were approx. 133
MEUR at the previous year's level. Due to the weak fourth quarter the operating
profit 8.3 MEUR was clearly below the previous year.
The general economic environment weakened during the year in Finland and
Norway. In Baltic especially the Lithuanian IT market weakened clearly and a
recovery is not expected before the second half of 2014.
The order backlog was 48.7 MEUR at the year-end, clearly below last year (61.4
MEUR). The typical year-end sales peak was smaller than in the previous year.
Third-party license sales were somewhat smaller than last year, but also
project sales disappointed especially in Norway and Finland. Customers'
decision making has slowed down and they order smaller projects than in the
previous years.
Year 2014 net sales and operating profit are estimated to be near last year's
level. Operating profit in the first quarter is expected to be weak, partially
due to profit improvement actions being taken.
Additional information:
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
CFO Satu Kankare, +358 205 777 202
This release is unaudited. The amounts in this report have been rounded from
exact numbers.
BUSINESS DEVELOPMENT 10-12/2013
Affecto's net sales in 10-12/2013 were 36.2 MEUR (10-12/2012: 38.3 MEUR). Net
sales in Finland were 14.9 MEUR (14.7 MEUR), in Norway 7.3 MEUR (8.0 MEUR), in
Sweden 6.2 MEUR (7.3 MEUR), in Denmark 4.1 MEUR (4.9 MEUR) and 4.5 MEUR (4.3
MEUR) in Baltic.
Net sales by reportable segments
Net sales, MEUR 10-12/13 10-12/12 2013 2012
Finland 14.9 14.7 53.2 52.6
Norway 7.3 8.0 29.6 27.2
Sweden 6.2 7.3 23.2 24.0
Denmark 4.1 4.9 15.4 16.0
Baltic 4.5 4.3 16.0 16.7
Other -0.9 -0.9 -4.4 -3.0
-------------------------------------------------
-------------------------------------------------
Group total 36.2 38.3 132.9 133.4
Net sales decreased by 5.5% in the fourth quarter. There was small growth in
Finland and Baltic, but net sales decreased in Norway, Sweden and Denmark. The
mix of the net sales developed unevenly and resource utilisation remained too
low in some segments. Net sales of both own consultancy work and third-party
licenses decreased, while the amount of subcontracting grew. Especially in
Baltic and Norway net sales included more subcontractors' work, while a
decrease in subcontracting was the largest reason for the decrease in Denmark.
The weakening of the Norwegian krona (NOK) during 2013 clearly contributed to
the decrease of sales reported in euros. The decrease in license sales affected
mostly Sweden and Norway.
Net sales of Information Management Solutions business in 10-12/2013 were 33.5
MEUR (35.5 MEUR) and net sales of Karttakeskus GIS business were 3.5 MEUR (3.2
MEUR).
Customers' interest is toward shorter and smaller projects than earlier and the
investment decisions take a long time. The general market sentiment is cautious
and has weakened especially in Finland and Norway. On the other hand the
Swedish and Danish markets have picked up somewhat. The sales peak typical to
the year-end was clearly smaller than in the previous year and the order
backlog decreased to 48.7 MEUR (61.4 MEUR).
PROFIT
Affecto's operating profit in 10-12/2013 was 2.3 MEUR (4.5 MEUR) and the
operational segment result was 2.7 MEUR (5.0 MEUR). Operational segment result
was in Finland 1.9 MEUR (2.5 MEUR), in Norway 0.5 MEUR (1.3 MEUR), in Sweden
0.1 MEUR (0.3 MEUR), in Denmark 0.6 MEUR (0.9 MEUR) and in Baltic -0.2 MEUR
(0.5 MEUR).
Operational segment result by reportable segments
Operational segment 10-12/13 10-12/12 2013 2012
result, MEUR
Finland 1.9 2.5 6.9 7.7
Norway 0.5 1.3 2.7 3.3
Sweden 0.1 0.3 -0.2 -0.9
Denmark 0.6 0.9 1.9 1.8
Baltic -0.2 0.5 0.2 2.0
Other -0.2 -0.6 -1.2 -1.4
----------------------------------------------------------
----------------------------------------------------------
Operational segment result 2.7 5.0 10.3 12.5
IFRS3 Amortization -0.4 -0.5 -2.0 -2.1
Operating profit 2.3 4.5 8.3 10.5
----------------------------------------------------------
Operating profit in the quarter decreased to 2.3 MEUR (4.5 MEUR) and
profitability decreased to 6% (12%). Profit decreased in all countries, most in
Norway and Baltic. Profitability was excellent 15% in Denmark and good 13% in
Finland. Profitability decreased to 7% in Norway due to a low resource
utilisation rate and a decrease in license sales. Decrease in license sales
affected mostly Sweden and Norway. In Baltic the Lithuanian market is slow and
additionally a 0.3 MEUR provision was recognized due to an unfinished project
in Lithuania. Net sales in Baltic also included a sizable amount of
subcontractors' work without impact on profit.
Taxes corresponding to the profit of the period have been entered as tax
expense. Net profit for the period was 1.4 MEUR, while it was 3.3 MEUR last
year.
YEAR 2013
Affecto is the forerunner in the field of Enterprise Information Management in
the Northern Europe. Our solutions for information management and business
analytics help organisations to improve productivity and competitiveness with
superior use of information in decision making and execution. We also deliver
operational solutions for improving and simplifying processes at customer
organisations and offer geographic information services.
Affecto's head office is in Finland. The company has subsidiaries in Finland,
Sweden, Norway, Denmark, Estonia, Lithuania, Latvia, Poland and South Africa.
NET SALES
Affecto's net sales in 2013 were 132.9 MEUR (2012: 133.4 MEUR). Net sales in
Finland were 53.2 MEUR (52.6 MEUR), in Norway 29.6 MEUR (27.2 MEUR), in Sweden
23.2 MEUR (24.0 MEUR), in Denmark 15.4 MEUR (16.0 MEUR) and 16.0 MEUR (16.7
MEUR) in Baltic.
Year 2013 started moderately well, but the effects of the continuing weak
general economy became more visible during the year affecting the net sales
negatively. Due to a weak second year-half, the net sales ended at previous
year's level of 133 MEUR. Thanks to a strong first half of the year Norway grew
by 9%. Net sales in Finland grew by 1%, while net sales in Sweden, Denmark and
Baltic decreased by 3-4%.
There were no major changes in the sales mix. The sales of own consultant work
decreased slightly, sales of subcontractor work grew slightly and third-party
license sales were at previous year's level.
Net sales of Information Management Solutions business were 123.6 MEUR (122.9
MEUR) and net sales of Karttakeskus GIS business were 12.2 MEUR (11.9 MEUR).
Customers' interest was toward shorter and smaller projects than earlier and
the investment decisions take a long time. The general market sentiment was
cautious and has been week especially in Finland, but weakened during the year
also in Norway and Baltic. On the other hand the market in Sweden and Denmark
have picked up somewhat. The order backlog is at previous year's level in
Sweden and Denmark, but has decreased in all other areas. The order backlog
decreased to 48.7 MEUR (61.4 MEUR).
PROFIT
Affecto's operating profit in 2013 was 8.3 MEUR (10.5 MEUR) and the operational
segment result was 10.3 MEUR (12.5 MEUR). Operational segment result was in
Finland 6.9 MEUR (7.7 MEUR), in Norway 2.7 MEUR (3.3 MEUR), in Sweden -0.2 MEUR
(-0.9 MEUR), in Denmark 1.9 MEUR (1.8 MEUR) and in Baltic 0.2 MEUR (2.0 MEUR).
Operating profit decreased to 8.3 MEUR (10.5 MEUR) and profitability decreased
to 6% (8%). Although there were no major changes in the sales mix, the cost
increases could not be fully compensated with volume growth, net sales included
a bit more subcontractors' work and license sales had a bit lower margin.
Profitability was at a good 13% level in Finland, but somewhat below the
previous year. Norway had 9% profitability, but profitability weakened toward
the year-end. Sweden made profit on the last two quarters, but profit for the
whole year was still 1% negative. Denmark increased profitability to 12%.
Profitability in Baltic, especially in Lithuania, weakened during the year and
profitability in Baltic was 1%.
According to the IFRS3 requirements, operating profit includes 2.0 MEUR (2.1
MEUR) of amortization on intangible assets related to acquisitions. The other
intangible assets impacting in the IFRS3 amortization totaled 1.8 MEUR at the
end of the reporting period and the amortization will mainly end during year
2014.
R&D costs totaled 0.0 MEUR (0.1 MEUR), i.e. 0.0% of net sales (0.1%). These
costs have been recognized as an expense in the income statement.
Taxes corresponding to the profit of the period have been entered as tax
expense. Net profit for the period was 5.6 MEUR, while it was 7.6 MEUR last
year.
FINANCE AND INVESTMENTS
At the end of the reporting period Affecto's balance sheet totaled 139.5 MEUR
(12/2012: 147.9 MEUR). Equity ratio was 53.0% (50.6%) and net gearing was 7.4%
(15.8%).
The financial loans were 26.5 MEUR (30.5 MEUR) at the end of reporting period.
The company's cash and liquid assets were 21.5 MEUR (19.8 MEUR). The
interest-bearing net debt was 5.0 MEUR (10.6 MEUR).
Cash flow from operating activities for the reported period was 10.9 MEUR (9.1
MEUR) and cash flow from investing activities was -1.6 MEUR (-1.0 MEUR).
Investments in tangible and intangible assets were 1.6 MEUR (1.0 MEUR).
The Annual General Meeting held in April decided to distribute a dividend of
3.4 MEUR (2.4 MEUR).
EMPLOYEES
The number of employees was 1088 persons at the end of the reporting period
(1096). 444 employees were based in Finland (416), 124 in Norway (131), 146 in
Sweden (140), 71 in Denmark (69) and 303 in the Baltic countries (340). The
average number of employees during the period was 1081 (1089). Wages and
salaries were 59.1 MEUR (60.2 MEUR in 2012, 57.4 MEUR in 2011).
Hellen Wohlin Lidgard started as the country manager in Sweden in April. Rene
Lykkeskov returned to his role as Affecto's chief strategy officer.
Pekka Eloholma served as the CEO of Affecto Plc until 31 December 2013. Board
member Lars Wahlström has been the interim CEO since 1 January 2014 and serves
in that position during the CEO recruitment process.
REVIEW OF MARKET DEVELOPMENTS
Uncertainty about the general economic development continued to affect
Affecto's business negatively. Customers' decision-making pace was slow and
they are ordering shorter projects than earlier, which has decreased the size
of the order backlog in most countries. In our operating area the general
customer activity has been growing in Sweden and Denmark, has decreased in
Finland and Norway, and has remained low in Baltic.
Customers' focus seems to be more on efficiency-improvement solution areas than
on growth-oriented sales solutions.
The demand for Business Intelligence (BI) and Enterprise Content Management
(ECM) solutions is estimated to continue growing more rapidly than the general
IT services. The analyst forecasts for the average annual growth of these
software license markets are approx. 4-8% in the next few years, but according
to our own estimates the realized growth in our operating area has been below
that.
BUSINESS REVIEW BY AREAS
The group's business is managed through five country units. Finland, Norway,
Sweden, Denmark and Baltic are also the reportable segments.
The net sales in Finland grew by 1% to 53.2 MEUR (52.6 MEUR). Operational
segment result was 6.9 MEUR (7.7 MEUR) and profitability was 13%. The year was
characterized by weak economic environment, customers being cautious and slow
with their investment decisions. Largest deal in the period was made with the
City of Helsinki regarding the maintenance of its data warehouse and reporting
systems.
The net sales of Karttakeskus GIS business, reported as part of Finland,
increased by 3% to 12.2 MEUR (11.9 MEUR) and its profitability was excellent.
Unit's order backlog developed positively, to which the deals made with the
Finnish Agency for Rural Affairs and the Finnish Transport Authority had a
clear impact.
The net sales in Norway were 29.6 MEUR (27.2 MEUR) and operational segment
result was 2.7 MEUR (3.3 MEUR). Net sales grew by 9% thanks to the good first
half of the year, and growth measured in local currency was even stronger.
Profitability decreased to 9% due to a weak fourth quarter. Customers prefer
shorter and smaller projects than earlier, which has also clearly decreased the
order backlog. Largest deals in the review period were made with Sparebank1 and
Elkjop Nordic.
Resource utilisation in Norway decreased toward the year-end contributing to
the low profitability. We assess that demand mix of BI services has changed
somewhat and additionally the share of solutions including low-cost work
components has grown. Actions to improve profitability will be executed in
Norway during early 2014 and will cause approx. 0.7 MEUR costs during the firstquarter.
The net sales in Sweden were 23.2 MEUR (24.0 MEUR) and operational segment
result -0.2 MEUR (-0.9 MEUR). The net sales decreased by 3%. Hellen Wohlin
Lidgard started as the country manager in April. Profitability turned positive
after summer, but the whole year profit was still slightly negative.
Development actions continue and the goal is to achieve normal profitability,
but structural and operational changes for the business will take some time.
Largest deal in the period was made with the Länsförsäkringar Bank.
The net sales in Denmark were 15.4 MEUR (16.0 MEUR) and operational segment
result was 1.9 MEUR (1.8 MEUR). Net sales decreased by 4%, but profit grew and
profitability increased to 12%. Market situation in Denmark is rather normal
and order backlog is at the last year's level. Largest deals in the period were
a three-year maintenance contract with a public sector customer and a contract
with BEC.
The net sales in Baltic (Lithuania, Latvia, Estonia, Poland, South Africa) were
16.0 MEUR (16.7 MEUR). Operational segment result was 0.2 MEUR (2.0 MEUR). Net
sales decreased by 4% and profitability decreased to 1%. Especially in
Lithuania, the largest market for us, the IT market has slowed down and public
sector customers' are launching only a few new projects. The Estonian market
situation is more normal. The situation in Lithuania is not expected to improve
during early 2014, but the new funding decisions by the European Union and the
possible entrance of Lithuania into Euro may increase IT investments in the
latter half of 2014.
ANNUAL GENERAL MEETING AND GOVERNANCE
The Annual General Meeting of Affecto Plc, held on 9 April 2013, adopted the
financial statements for 1.1.-31.12.2012 and discharged the members of the
Board of Directors and the CEO from liability. Approximately 35 percent of
Affecto's shares and votes were represented at the Meeting. The Annual General
Meeting decided on a dividend distribution of EUR 0.16 per share for the year
2012.
Aaro Cantell, Magdalena Persson, Jukka Ruuska, Olof Sand, Tuija Soanjärvi and
Lars Wahlström were elected as members of the Board of Directors. The
organization meeting of the Board of Directors re-elected Aaro Cantell as
Chairman and Jukka Ruuska as Vice-Chairman. KPMG Oy Ab was elected as the
auditor of the company.
The Meeting approved the Board's proposal for appointing a Nomination Committee
to prepare proposals concerning members of the Board of Directors and their
remunerations for the following Annual General Meeting. The Nomination
Committee will consist of the representatives of the three largest shareholders
and the Chairman of the Board of Directors, acting as an expert member, if
he/she is not appointed representative of a shareholder. The members
representing the shareholders will be appointed by the three shareholders whose
share of ownership of the shares of the company is largest on 31 October
preceding the Annual General Meeting.
The Meeting approved the Board's proposal for issuing stock options 2013. The
maximum total number of stock options issued will be 400 000 and they will be
issued gratuitously or for consideration determined by the Board of Directors.
According to the Articles of Association, the General Meeting of Shareholders
annually elects the Board of Directors by a majority decision. The term of
office of the board members expires at the end of the next Annual General
Meeting of Shareholders following their election. The Board appoints the CEO.
The Articles of Association do not contain any special rules for changing the
Articles of Association or for issuing new shares.
The Company will issue a Corporate Governance Statement for year 2013 that has
been composed in accordance with Recommendation 54 of the Corporate Governance
code and Chapter 7, Section 7 of the Finnish Securities Market Act. The
Corporate Governance Statement is issued separately from the report of the
board of directors and it will be available on the company's website.
THE AUTHORIZATIONS GIVEN TO THE BOARD OF DIRECTORS
The complete contents of the new authorizations given by the Annual General
Meeting held on 9 April 2013 have been published in the stock exchange release
regarding the Meetings' decisions. Key facts about the authorizations:
The Annual General Meeting decided to authorize the Board of Directors to
decide to acquire the company's own shares with distributable funds. A maximum
of 2 100 000 shares may be acquired. The authorization shall be in force until
the next Annual General Meeting.
The Annual General Meeting decided to authorize the Board of Directors to
decide to issue new shares and to convey the company's own shares held by the
company in one or more tranches. The share issue may be carried out as a share
issue against consideration or without consideration on terms to be determined
by the Board of Directors and in relation to a share issue against
consideration at a price to be determined by the Board of Directors. A maximum
of 4 200 000 new shares may be issued. A maximum of 2 100 000 own shares held
by the company may be conveyed. In addition, the authorization includes the
right to decide on a share issue without consideration to the company itself so
that the amount of own shares held by the company after the share issue is a
maximum of one-tenth (1/10) of all shares in the company. The authorization
shall be in force until the next Annual General Meeting. Based on this
authorization, a total of 391 460 new shares have been issued in connection
with the termination of the Affecto Management holding company arrangement.
Based on the authorization a total of 13 875 shares have been conveyed to the
Board members as a partial payment of their fees, in accordance to the decision
made by the Annual General Meeting.
SHARES AND TRADING
During the review period a total of 384 076 new shares have been subscribed
with the 2008B and 2008C options.
The company has one share series and all shares have similar rights. At the end
of the review period Affecto Plc's share capital consisted of 22 318 604
shares. The company owned directly 64 552 shares and a fully owned subsidiary
Affecto Management Oy owned 823 000 shares. Thus there are 887 552 treasury
shares in total, approx. 4 % of the total amount of the shares.
In 1-12/2013 the highest share price was 4.80 euro, the lowest price 2.98 euro,
the average price 4.01 euro and the closing price 4.57 euro. The trading volume
was 6.2 million shares, corresponding to 28% of the number of shares at the end
of the period. The market value of shares was 97.9 MEUR at the end of the
period excluding the treasury shares.
2008C options have been listed on Nasdaq OMX Helsinki since 2 April 2013. 2008B
options expired in May. A total of 259 000 of 2013 stock options have been
conveyed to key employees for the 0.20 eur/option issue price that was decided
by the Board.
SHAREHOLDERS
The company had a total of 2866 owners on 31 December 2013 and the foreign
ownership was 9%. The list of the largest owners can be found in the company's
web site. Information about the ownership structure and option programs is
included as a separate section in the financial statements. The ownership of
the board members, CEO and their controlled corporations totaled approx. 10.4%.
According to the flagging announcement made on 26 September 2013, the ownership
of Arendals Fossekompani ASA has decreased below 5%. According to the flagging
announcements made on 25 October 2013 and 28 October 2013 the total ownership
of funds managed by Sp-Rahastoyhtiö Oy and Säästöpankki Kotimaa fund have
exceeded 5%.
ASSESSMENT OF RISKS AND UNCERTAINTIES
Affecto's order backlog has traditionally been only for a few months, which
decreases the reliability of longer-term forecasts. The changes in the general
economic conditions and the operating environment of customers have direct
impact in Affecto's markets. The uncertain economy may affect Affecto's
customers negatively, and their slower investment decision making, postponing
or cancellation of IT investments may have negative impact on Affecto. Slower
decision making by customers may decrease the predictability of the business
and may decrease the utilisation rate of resources.
Affecto sells third party software licenses as part of its solutions. Typically
the license sales have most impact on the last month of each quarter and
especially in the fourth quarter. This increases the fluctuation in net sales
between quarters and increases the difficulty of accurately forecasting the
quarters. Affecto had license sales of approx. 10 MEUR in 2013.
Affecto's balance sheet includes a material amount of goodwill. Goodwill has
been allocated to cash generating units. Cash generating units, to which
goodwill has been allocated, are tested for impairment both annually and
whenever there is an indication that the unit may be impaired. Potential
impairment losses may have material effect on reported profit and value of
assets. The greatest uncertainty is related to Sweden.
Affecto's success depends also on good customer relationships. Affecto has a
well-diversified customer base. The largest customer generated 3% of Affecto's
net sales, while the 10 largest together generated 17%. Although none of the
customers is critically large for the whole group, there are large customers in
various countries who are significant for local business in the country.
Approximately a half of Affecto's business is in Sweden, Norway and Denmark,
thus the development of the currencies of these countries (SEK, NOK and DKK)
may have impact on Affecto's profitability. The main part of the companies'
income and costs are within the same currency, which decreases the risks.
EVENTS AFTER THE REPORTING PERIOD
Board member Lars Wahlström has been the interim CEO since 1 January 2014 and
serves in that position during the CEO recruitment process.
DIVIDEND PROPOSAL
Distributable funds of the group parent company on 31 December 2013 are 72 180
865,11 euros, of which the distributable profit is 28 956 939,46 euros. Board
of Directors proposes that from the financial year 2013 a dividend of 0.16
euros per share will be paid, a total of 3 560 648.32 euros with the
outstanding number of shares at the end of the financial period, and the rest
is carried forward to the retained earnings account. No material changes have
taken place in respect of the company's financial position after the balance
sheet date. The liquidity of the company is good and in the opinion of the
Board of Directors proposed distribution of profit does not risk the liquidity
of the company.
FUTURE OUTLOOK
Year 2014 net sales and operating profit are estimated to be near last year's
level. Operating profit in the first quarter is expected to be weak, partially
due to profit improvement actions being taken.
The company does not provide exact guidance for net sales or EBIT development,
as single projects and timing of license sales may have large impact on
quarterly sales and profit.
Affecto Plc
Board of Directors
You can order Affecto's stock exchange releases to be delivered automatically
by e-mail.
Please visit the Investors section of the company website: www.affecto.com
A briefing for analysts and media will be arranged at 14.00 at Restaurant
Savoy, Eteläesplanadi 14, Helsinki.
www.affecto.com
-----
Financial information:
1. Consolidated income statement, consolidated comprehensive income statement,
balance sheet, cash flow statement and statement of changes in equity
2. Notes
3. Key figures
1. Consolidated income statement, consolidated comprehensive income statement,
balance sheet, cash flow statement and statement of changes in equity
CONSOLIDATED INCOME STATEMENT
(1 000 EUR) 10-12/2 10-12/2 2013 2012
013 012
----------------------------------
----------------------------------
Net sales 36 195 38 301 132 896 133
400
Other operating income 58 196 65 221
Changes in inventories of finished 0 -68 306 -94
goods and work in progress
Materials and services -9 485 -8 997 -29 952 -27
072
Personnel expenses -19 035 -19 516 -74 031 -75
542
Other operating expenses -4 705 -4 554 -17 803 -17
106
Other depreciation and amortisation -294 -322 -1 230 -1 290
IFRS3 amortisation -442 -521 -1 989 -2 067
Operating profit 2 292 4 519 8 262 10 451
Financial income and expenses -163 -232 -289 -408
Profit before income tax 2 129 4 287 7 973 10 042
Income tax -698 -1 036 -2 407 -2 467
Profit for the period 1 431 3 250 5 566 7 575
Profit for the period
attributable to:
Owners of the parent company 1 433 3 260 5 493 7 552
Non-controlling interest -2 -9 73 23
Earnings per share
(EUR per share):
Basic 0.07 0.16 0.26 0.37
Diluted 0.07 0.15 0.26 0.36
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
(1 000 EUR) 10-12/2 10-12/2 2013 2012
013 012
----------------------------------
----------------------------------
Profit for the period 1 431 3 250 5 566 7 575
Other comprehensive income
Items that may be reclassified subsequently
to the statement of income:
Translation difference -1 029 -323 -3 074 1 723
Total Comprehensive income 402 2 927 2 491 9 298
for the period
Total Comprehensive income
attributable to:
Owners of the parent company 404 2 937 2 419 9 275
Non-controlling interest -2 -9 73 23
CONSOLIDATED BALANCE SHEET
(1 000 EUR) 12/2013 12/2012
-----------------
-----------------
Non-current assets
Property, plant and equipment 1 947 1 711
Goodwill 72 166 74 651
Other intangible assets 2 072 4 098
Deferred tax assets 1 606 1 506
Trade and other receivables 4 11
77 795 81 977
Current assets
Inventories 622 317
Trade and other receivables 38 969 45 529
Current income tax receivables 615 325
Cash and cash equivalents 21 469 19 767
61 675 65 937
----------------------------------------------------
----------------------------------------------------
Total assets 139 470 147 914
Equity attributable to owners
of the parent Company
Share capital 5 105 5 105
Reserve of invested non-restricted 47 448 46 643
equity
Other reserves 763 693
Treasury shares -2 165 -2 202
Translation differences -2 128 946
Retained earnings 18 184 15 781
----------------------------------------------------
----------------------------------------------------
67 207 66 965
Non-controlling interest - 311
Total equity 67 207 67 277
Non-current liabilities
Loans and borrowings 22 420 26 387
Deferred tax liabilities 505 987
22 924 27 374
Current liabilities
Loans and borrowings 4 000 4 000
Trade and other payables 42 788 46 745
Current income tax liabilities 1 913 2 159
Provisions 638 359
49 339 53 263
Total liabilities 72 264 80 638
----------------------------------------------------
----------------------------------------------------
Equity and liabilities 139 470 147 914
SUMMARY CONSOLIDATED CASH FLOW STATEMENT
(1 000 EUR) 2013 2012
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Cash flows from operating activities
Profit for the period 5 566 7 575
Adjustments to profit for the period 6 271 6 449
11 837 14 024
Change in working capital 2 863 -1 340
Interest and other financial cost paid -566 -1 207
Interest and other financial income received 123 165
Income taxes paid -3 343 -2 525
----------------------------------------------------------------
----------------------------------------------------------------
Net cash from operating activities 10 915 9 117
Cash flows from investing activities
Acquisition of tangible and intangible assets -1 566 -1 008
Proceeds from sale of tangible and 1 49
intangible assets
Net cash used in investing activities -1 564 -959
----------------------------------------------------------------
Cash flows from financing activities
Repayments of non-current borrowings -4 000 -4 000
Acquisition of treasury shares - -266
Proceeds from share options exercised 781 49
Acquisition of non-controlling interest -30 -134
Dividends paid to the owners -3 444 -2 367
of the parent company
----------------------------------------------------------------
----------------------------------------------------------------
Net cash from financing activities -6 694 -6 718
(Decrease)/increase in cash and cash equivalents 2 657 1 440
Cash and cash equivalents 19 767 17 964
at the beginning of the period
Foreign exchange effect on cash -954 363
Cash and cash equivalents 21 469 19 767
at the end of the period
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to owners of the parent
company
----------------------------------------------------
--------
(1 000 EUR) Share Reserve of Other Treasu Trans Ret. Non-con Total
capita invested reserv ry lat. earnin trollin equity
l non-restri es shares diff. gs g
cted interes
equity t
--------------------------------------------
Equity at 1 5 105 46 643 693 -2 202 946 15 781 311 67 277
January
2013
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit 5 493 73 5 566
Translation -3 074 -3 074
difference
s
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total -3 074 5 493 73 2 491
compre-hen
sive income
Share-based 70 70
payments
Exercise of 781 781
share
options
Treasury 25 37 62
shares as
compensati
on to the
Board
Acquisition 355 -384 -30
of
non-contro
lling
interest
Dividends -3 444 -3 444
paid
Equity at 5 105 47 448 763 -2 165 -2 128 18 184 - 67 207
31
December
2013
--------------------------------------------------------------------------------
Equity attributable to owners of the parent
company
----------------------------------------------------
--------
(1 000 EUR) Share Reserve of Other Treasu Trans Ret. Non-con Total
capita invested reserv ry lat. earnin trollin equity
l non-restri es shares diff. gs g
cted interes
equity t
--------------------------------------------
Equity at 1 5 105 46 591 593 -1 996 -777 10 642 376 60 535
January
2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit 7 552 23 7 575
Translation 1 723 1 723
difference
s
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 1 723 7 552 23 9 298
compre-hen
sive income
Share-based 100 100
payments
Exercise of 49 49
share
options
Acquisition -266 -266
of
treasury
shares
Treasury 2 60 62
shares as
compensati
on to the
Board
Acquisition -45 -89 -135
of
non-contro
lling
interest
Dividends -2 367 -2 367
paid
Equity at 5 105 46 643 693 -2 202 946 15 781 311 67 277
31
December
2012
--------------------------------------------------------------------------------
2. Notes
2.1. Basis of preparation
This financial statement bulletin has been prepared in accordance with the IFRS
recognition and measurement principles and in accordance with IAS 34, Interim
Financial reporting. The financial statement bulletin should be read in
conjunction with the annual financial statements for the year ended 31 December
2012. In material respects, the same accounting policies have been applied as
in the 2012 annual consolidated financial statements. The amendments to and
interpretations of IFRS standards that entered into force on 1 January 2013 had
no material impact on this interim report.
2.2. Segment information
Affecto's reporting segments are based on geographical locations and are
Finland, Norway, Sweden, Denmark and Baltic.
Segment net sales and result
(1 000 EUR) 10-12/2013 10-12/2012 2013 2012
-----------------------------------------
-----------------------------------------
Total net sales
Finland 14 889 14 680 53 175 52 570
Norway 7 319 8 003 29 554 27 161
Sweden 6 173 7 323 23 152 23 984
Denmark 4 140 4 947 15 363 16 038
Baltic 4 530 4 287 16 018 16 684
Other -856 -938 -4 366 -3 036
Group total 36 195 38 301 132 896 133 400
--------------------------------------------------------------------------
Operational segment result
Finland 1 935 2 531 6 863 7 747
Norway 477 1 311 2 718 3 317
Sweden 74 335 -229 -945
Denmark 633 922 1 884 1 800
Baltic -200 520 193 1 981
Other -185 -579 -1 177 -1 382
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Total operational segment result 2 734 5 040 10 251 12 518
IFRS3 amortisation -442 -521 -1 989 -2 067
Operating profit 2 292 4 519 8 262 10 451
--------------------------------------------------------------------------
Net sales by business lines
(1 000 EUR) 10-12/2013 10-12/2012 2013 2012
----------------------------------------- -----------------------------------------
Information Management Solutions 33 528 35 511 123 608 122 892
Karttakeskus GIS business 3 470 3 159 12 239 11 884
Other -804 -369 -2 950 -1 376
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Group total 36 195 38 301 132 896 133 400
2.3. Changes in intangible and tangible assets
(1 000 EUR) 1-12/2013 1-12/2012
---------------------
---------------------
Carrying amount at the beginning of period 80 460 81 127
Additions 1 566 1 008
Disposals -1 -30
Depreciation and amortization for the period - 3 219 - 3 357
Exchange rate differences -2 621 1 711
Carrying amount at the end of period 76 185 80 460
------------------------------------------------------------------
2.4. Share capital, reserve of invested non-restricted equity and treasury
shares
(1 000 EUR) Number of Share Reserve of Treasury
shares capital invested shares
outstanding non-restricted
equity
------------------------------------------------------
------------------------------------------------------ 1.1.2012 20 693 468 5 105 46 591 -1 996
Exercise of share options 26 600 - 49 -
Acquisition of treasury -100 000 - - -266
shares
Treasury shares of 21 573 - 2 60
compensation to the
Board of Directors
31.12.2012 20 641 641 5 105 46 643 -2 202
1.1.2013 20 641 641 5 105 46 643 -2 202
Exercise of share options 384 076 - 729 -
Payment for share options - - 52 -
Treasury shares of 13 875 - 25 37
compensation to the
Board of Directors
Directed share issue 391 460 - - -
31.12.2013 21 431 052 5 105 47 448 -2 165
At the end of reporting period Affecto Plc owned 64 552 treasury shares. In
addition to that Affecto Management Oy, a fully owned subsidiary, owned 823 000
shares in Affecto Plc. In total these 887 552 shares correspond to 4.0% of the
total amount of the shares. The amount of registered shares was 22 318 604
shares.
2.5. Interest-bearing liabilities
(1 000 EUR) 31.12.2013 31.12.2012
Interest-bearing non-current liabilities
Loans from financial institutions, 22 420 26 387
non-current portion
Loans from financial institutions, 4 000 4 000
current portion
----------------------------------------------------------------
----------------------------------------------------------------
26 420 30 387
Affecto's loan facility agreement includes financial covenants, breach of which
might lead to an increase in cost of debt or cancellation of the facility
agreement. The covenants are based on total net debt to earnings before
interest, taxes, depreciation and amortization and total net debt to total
equity. The covenants will be measured quarterly, and these terms and
conditions of covenants were met at the end of the reporting period.
2.6. Contingencies and commitments
The future aggregate minimum lease payments under non-cancelable operating
leases:
(1 000 EUR) 31.12.2013 31.12.2012
Not later than one (1) year 3 675 3 966
Later than one (1) year, 3 719 6 594
but not later than five (5) years
Later than five (5) years - -
Total 7 394 10 561
---------------------------------------------------------
Guarantees given:
(1 000 EUR) 31.12.2013 31.12.2012
Liabilities secured by a mortgage
Financial loans 26 500 30 500
The above-mentioned liabilities are secured by bearer bonds with a nominal
value of 52.5 million euro. The bonds are held by Nordea Pankki Suomi Oyj and
secured by a mortgage on company assets of the group companies. In addition,
the shares in Affecto Finland Oy and Affecto Norway AS have been pledged to
secure the financial liabilities above.
Other securities given on own behalf:
(1 000 EUR) 31.12.2013 31.12.2012
Pledges 36 6
Other guarantees 2 836 3 559
Other guarantees are mostly securities issued for customer projects. These
guarantees include both bank guarantees secured by parent company of the group
and guarantees issued by the parent company and subsidiaries.
2.7. Related party transactions
Key management compensation and remunerations to the board of directors:
(1 000 EUR) 1-12/2013 1-12/2012
Salaries and other short-term employee benefits 2 017 2 184
Post-employment benefits 288 279
Termination benefits 85 245
Share-based payments 6 13
---------------------------------------------------------------------
---------------------------------------------------------------------
Total 2 395 2 721
Loans to related party:
(1 000 EUR) 31.12.2013 31.12.2012
Loans to key management of the group - 1 624
Purchases from related party:
(1 000 EUR) 1-12/20 1-12/20
13 12
Purchases from the entity that are controlled by key 5 -
management personnel of the group
3. Key figures
10-12/2013 10-12/2012 2013 2012
-----------------------------------------
-----------------------------------------
Net sales, 1 000 eur 36 195 38 301 132 896 133 400
EBITDA, 1 000 eur 3 028 5 362 11 481 13 808
Operational segment result, 2 734 5 041 10 251 12 518
1 000 eur
Operating result, 1 000 eur 2 292 4 519 8 262 10 451
Result before taxes, 1 000 eur 2 129 4 287 7 973 10 042
Profit attributable to the owners 1 433 3 260 5 493 7 552
of the parent company, 1 000 eur
EBITDA, % 8.4 % 14.0 % 8.6 % 10.4 %
Operational segment result, % 7.6 % 13.2 % 7.7 % 9.4 %
Operating result, % 6.3 % 11.8 % 6.2 % 7.8 %
Result before taxes, % 5.9 % 11.2 % 6.0 % 7.5 %
Net income for equity holders 4.0 % 8.5 % 4.1 % 5.7 %
of the parent company, %
Equity ratio, % 53.0 % 50.6 % 53.0 % 50.6 %
Net gearing, % 7.4 % 15.8 % 7.4 % 15.8 %
Interest-bearing net debt, 4 950 10 621 4 950 10 621
1 000 eur
Gross investment in non-current 210 175 1 566 1 008
assets (excl. acquisitions),
1 000 eur
Gross investments, % of net sales 0.6 % 0.5 % 1.2 % 0.8 %
Order backlog, 1 000 eur 48 682 61 359 48 682 61 359
Average number of employees 1 087 1 095 1 081 1 089
Earnings per share, eur 0.07 0.16 0.26 0.37
Earnings per share (diluted), 0.07 0.15 0.26 0.36
eur
Equity per share, eur 3.14 3.24 3.14 3.24
Average number of shares, 21 212 20 615 20 906 20 642
1 000 shares
Number of shares at the end of 21 431 20 642 21 431 20 642
period, 1 000 shares
Calculation of key figures
EBITDA = Earnings before interest, taxes,
depreciation, amortization and impairment losses
Operational segment result = Operating profit before amortizations on
fair value adjustments due to business
combinations (IFRS3) and goodwill
impairments
Equity ratio, % = Total equity *100
________________________________
Total assets - advance payments
Gearing, % = Interest-bearing liabilities - cash *100
and cash equivalents
__________________________________
Total equity
Interest-bearing net debt = Interest-bearing liabilities - cash and
cash equivalents
Earnings per share (EPS) = Profit attributable to owners of the parent
company
______________________________________
Weighted average number of ordinary shares in
issue during the period
Equity per share = Total equity
______________________________________
Adjusted number of shares at the end of
the period
Market capitalization = Number of shares at the end of period
(excluding company's own shares held by
the company) x share price at closing date
-----
Additional information:
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
CFO Satu Kankare, +358 205 777 202
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