2016-02-04 07:00:04 CET
2016-02-04 07:00:04 CET
REGULATED INFORMATION
Digia Oyj - Financial Statement Release
DIGIA'S FINAL QUARTER 2015: CONTINUED STRONG NET SALES GROWTH (12.2%)
Helsinki, 2016-02-04 07:00 CET (GLOBE NEWSWIRE) -- DIGIA PLC FINANCIAL
STATEMENT RELEASE, 4 FEBRUARY 2016 AT 08:00
DIGIA'S FINAL QUARTER 2015: CONTINUED STRONG NET SALES GROWTH (12.2%)
SUMMARY:
January-December
- Consolidated net sales EUR 107.9 (97.4) million, up 10.7 per cent
- Operating profit before extraordinary items EUR 8.4 (4.5) million
- Extraordinary items include EUR 0.8 million in restructuring costs
(1-12/2014: EUR 0.2 million)
- Operating profit after extraordinary items EUR 7.6 (4.3) million
- Profitability (EBIT%) before extraordinary items 7.8 (4.6) per cent and after
extraordinary items 7.1 (4.4) per cent
- Product business accounted for 43.2 (40.7) per cent of net sales
- Earnings per share before extraordinary items EUR 0.29 (0.14) and after
extraordinary items EUR 0.25 (0.14)
October-December
- Consolidated net sales EUR 30.6 (27.2) million, up 12.2 per cent
- Operating profit before extraordinary items EUR 2.2 (2.5) million
- Extraordinary items include EUR 0.1 million in restructuring costs
(10-12/2014: EUR 0.2 million).
- Operating profit after extraordinary items EUR 2.1 (2.3) million
- Profitability (EBIT%) was 7.2 (9.0) per cent before extraordinary items and
7.0 (8.5) per cent after extraordinary items
- Product business accounted for 43.4 (38.9) per cent of net sales
- Earnings per share before extraordinary items EUR 0.07 (0.09) and after
extraordinary items EUR 0.07 (0.08)
Digia performed very well in 2015, with consolidated net sales showing
significant growth (10.7%) and operating profit before extraordinary items
almost doubling from the previous year.
With a net sales increase of 32.0 per cent during the review period, the Qt
segment showed particularly strong growth. Qt's growth was considerably fuelled
by the strengthening of the US dollar against the euro. Excluding the impact of
foreign exchange rate changes, Qt's net sales growth amounted to 25.5 per cent
in the review period. Qt's net sales showed a steady improvement not only
compared to the previous year, but also in a quarterly comparison.
Similarly, in the domestic segment net sales developed favourably towards the
end of the period. Net sales grew by 5.1 per cent in the review period and as
much as 8.3 per cent in the final quarter from the comparison period last year.
Consolidated operating profit showed a marked improvement in the wake of net
sales growth. Operating profit improved, particularly in the Qt segment which
began to turn a profit during the review period and continued to do so
throughout the period. Meanwhile in the domestic business, operating profit
fell slightly, particularly in the final quarter, and remained below last
year's comparison figures, which were particularly good in terms of
profitability.
Digia expects overall demand to remain moderate in the domestic segment and
anticipates continued net sales growth in 2016. The outlook is considered
particularly positive in the first half. Profitability in 2016 is expected to
remain more or less on the same level as in the previous year.
Digia expects to see Qt's net sales growth in 2016 to be at least in line with
the general systems software development market growth rate, but growth is
likely to slow down from the extremely strong figures recorded last year. In
2016, the exceptional licence deal agreed with Nokia Corporation in connection
with the acquisition of the Qt business in 2012 will no longer generate any net
sales for Digia, unlike in 2015 when approximately EUR 1.4 million was recorded
in net sales.
Exchange rate fluctuations, particularly between US dollar and euro, may have a
major impact on Qt's net sales development in the future, but Digia estimates
this effect to be less significant in 2016 than a year earlier. Another factor
contributing to considerable fluctuation in quarterly net sales and
profitability in particular is the contract turnaround times, which in the
major customer segment are very long at up to 18 months.
Digia's planned demerger and the resulting establishment of Qt as an
independent public listed company involves considerable expenses, some
non-recurring and others continuing. These will tax the profitability of the Qt
business in the future. According to Digia's estimate, Qt will record a loss in
2016, but will gradually improve its performance, driven by positive net sales
development. However, investments in sales work and thereby in better growth
opportunities will continue to affect profit performance in the future.
Proposal for dividend distribution
On 31 December 2015, the distributable shareholders’ equity of Digia Plc was
EUR 34,214,777.30, of which EUR 2,772,415.03 was the net profit for the year.
At the Annual General Meeting, the Board of Directors will propose that a
dividend of EUR 0.08 per share be paid according to the confirmed Balance Sheet
for the fiscal year ending 31 December 2015. Shareholders listed on the
shareholder register maintained by Euroclear Finland Ltd on the dividend
reconciliation date, 18 March 2016, will be eligible for the payment of
dividend. Dividends will be paid on 29 March 2016.
GROUP KEY FIGURES AND RATIOS
10-12/2 10-12/2 Change, 1-12/20 1-12/2 Change,
015 014 % 15 014 %
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Net sales 30,567 27,246 12.2% 107,880 97,433 10.7%
--------------------------------------------------------------------------------
Operating profit before 2,188 2,460 -11.0% 8,399 4,461 88.3%
extraordinary items
--------------------------------------------------------------------------------
- % of net sales 7.2% 9.0% 7.8% 4.6%
--------------------------------------------------------------------------------
Operating profit 2,128 2,309 -7.8% 7,641 4,310 77.3%
--------------------------------------------------------------------------------
- % of net sales 7.0% 8.5% 7.1% 4.4%
--------------------------------------------------------------------------------
Net profit 1,447 1,681 -13.9% 5,228 2,850 83.4%
--------------------------------------------------------------------------------
- % of net sales 4.7% 6.2% 4.8% 2.9%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Return on equity, % 14.4% 18.7% 13.5% 7.8%
--------------------------------------------------------------------------------
Return on capital invested, 16.9% 18.9% 15.6% 9.0%
%
--------------------------------------------------------------------------------
Interest-bearing 13,513 16,245 -16.8% 13,513 16,245 -16.8%
liabilities
--------------------------------------------------------------------------------
Cash and cash equivalents 6,710 5,132 30.7% 6,710 5,132 30.7%
--------------------------------------------------------------------------------
Net gearing 16.6% 30.3% 16.6% 30.3%
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Equity ratio, % 53.7% 51.5% 53.7% 51.5%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR, 0.07 0.08 0.25 0.14
undiluted
--------------------------------------------------------------------------------
Earnings per share, EUR, 0.07 0.08 0.25 0.14
diluted
--------------------------------------------------------------------------------
MARKETS AND DIGIA'S BUSINESS OPERATIONS
DOMESTIC SEGMENT:
Demand remained strong for integration and analytics services during the review
period. Digia's business outperformed general IT market growth, and
profitability remained on a healthy level. Investments to enhance delivery and
service capacity continued, and are expected to bolster net sales development
in 2016. Meanwhile, continued major investments in the development of product
and business models for site optimisation taxed the segment's overall
profitability during the review period.
On the whole, the ERP and MES business showed moderate development during the
review period, with some quarterly fluctuation which is typical in this
business area. The Microsoft technology based business grew briskly, with
excellent profitability. Quarterly fluctuation was particularly strong in the
ERP business based on Microsoft technologies. Significant new delivery and
application management service agreements were signed in this business area,
which contributed to a slight increase in net sales in the review period and
which will provide a firm foundation for 2016. Quarterly fluctuation was also
notable in the ERP business based on Digia's own software. Net sales, which had
been declining in the third quarter, took an upward turn in the final quarter,
resulting in slight overall growth for the full review period.
The business segment based on financial-sector software solutions showed growth
throughout the review period. The segment will continue to invest in
recruitment, and operations in Finland are forecast to grow faster than the
general IT markets in 2016.
In the service business, demand and profitability showed a highly positive
performance trend during the period, with the final quarter showing
particularly strong net sales growth.
QT SEGMENT:
Qt business showed very strong growth throughout the period. Operating profit
also improved on the back of net sales growth, and operations were in the
black.
During the review period, the new Qt 5.5 version was launched. The www.qt.io
website launched for the Qt segment has been well received. This website plays
an extremely important role in managing the Qt ecosystem, and Digia will
continue to make substantial developments in this channel. The Qt World Summit
held in Berlin in October was an event where the global Qt community gathered
to present and discuss current Qt technology issues. The event was a huge
success. It attracted more than 1,000 visitors from all over the world:
customers, partners, and members of the Qt developer community.
During the review period, a new office was opened in Korea, and sales resources
were strengthened, especially in Asia. Business development efforts were
particularly focused on consumer electronics and automotive segments.
NET SALES
Digia’s consolidated net sales for the period totalled EUR 107.9 (97.4)
million, representing an increase of 10.7 per cent year-on-year.
Net sales in the domestic segment rose by 5.1 per cent to EUR 80.9 (77.0)
million. Net sales in the Qt segment totalled EUR 26.9 (20.4) million,
representing an increase of 32.0 per cent.
The increase in the Group's net sales could be largely attributed to the Qt
segment's strong growth. This growth in the Qt segment stemmed from good sales
combined with major contracts in automotive products and DTV receivers in
particular. Favourable trends in net sales were also supported by the US dollar
strengthening against the euro. The impact of exchange rate fluctuations on
Qt’s net sales growth amounted to a total of EUR 1.3 million during the review
period.
During the reporting period, the product business accounted for EUR 46.6
million (1-12/2014: EUR 39.7 million), or 43.2 (40.7) per cent of consolidated
net sales.
International operations accounted for EUR 28.2 million (1-12/2014: EUR 20.2
million), or 26.1 (20.7) per cent of consolidated net sales.
Digia’s consolidated net sales for the final quarter were EUR 30.6 (27.2)
million, up 12.2 per cent on the same period last year.
Net sales from the domestic segment increased by 8.3 per cent to EUR 23.2
(21.4) million, while net sales from the Qt business increased by 26.3 per cent
to EUR 7.4 (5.8) million.
During the fourth quarter, the product business accounted for EUR 13.3 (10.6)
million of consolidated net sales, or 43.4 (38.9) per cent.
In the same period, the international business accounted for EUR 8.0 (5.7)
million of consolidated net sales, or 26.1 (21.0) per cent.
PROFIT PERFORMANCE AND PROFITABILITY
Digia’s consolidated operating profit before extraordinary items was EUR 8.4
(4.5) million. Profitability (EBIT%) before extraordinary items was 7.8 (4.6)
per cent. Consolidated operating profit after extraordinary items was EUR 7.6
(4.3) million for the review period. Profitability (EBIT%) stood at 7.1 (4.4)
per cent.
Consolidated operating profit before extraordinary items was EUR 2.2 (2.5)
million in the final quarter, representing a year-on-year decrease of 11.0 per
cent. Operating profit after extraordinary items amounted to EUR 2.1 (2.3)
million in the final quarter, with profitability (EBIT%) at 7.0 (8.5) per cent.
In the domestic segment, operating profit before extraordinary items totalled
EUR 6.5 (6.3) million, up 2.7 per cent, with profitability (EBIT%) at 8.0 (8.2)
per cent. Operating profit after extraordinary items was EUR 5.9 (6.3) million
and profitability (EBIT%) 7.2 (8.2) per cent.
Operating profit before extraordinary items from domestic operations for the
final quarter totalled EUR 2.0 (2.7) million, down 24.2 per cent, and
profitability (EBIT%) was 8.8 (12.6) per cent. Operating profit after
extraordinary items for the final quarter was EUR 2.0 (2.7) million and
profitability (EBIT%) was 8.8 (12.6) per cent.
The Qt business recorded an operating profit of EUR 1.9 (-1.9) million before
extraordinary items for the review period, and the segment's profitability
(EBIT%) was 7.1 (-9.1) per cent. Qt's operating profit after extraordinary
items was EUR 1.8 (-2.0) million and its profitability (EBIT%) stood at 6.6
(-9.8) per cent.
Qt's operating profit before extraordinary items in the final quarter was EUR
0.1 (-0.2) million, and the segment's profitability (EBIT%) was 2.0 (-4.0) per
cent. Qt's operating profit after extraordinary items for the final quarter was
EUR 0.1 (-0.4) million and profitability (EBIT%) was 1.2 (-6.6) per cent.
The increase in consolidated operating profit during the review period could be
largely attributed to the notable profitability improvement in the Qt segment.
Consolidated earnings before tax for the period totalled EUR 6.9 (3.6) million,
and after tax EUR 5.2 (2.9) million. Consolidated earnings before tax for the
fourth quarter were EUR 1.9 (2.1) million, and net profit totalled EUR 1.5
(1.7) million.
Consolidated earnings per share for the review period were EUR 0.29 (1-12/2014:
0.14) before extraordinary items and EUR 0.25 (0.14) after extraordinary items.
Consolidated earnings per share for the final quarter were EUR 0.07 (Q4/2014:
0.09) before extraordinary items and EUR 0.07 (0.08) after extraordinary items.
The Group’s net financial expenses for the review period were EUR 0.7 (0.7)
million and for the final quarter EUR 0.2 (0.2) million.
FINANCIAL POSITION AND EXPENDITURE
At the end of the review period, the Digia Group’s consolidated balance sheet
total stood at EUR 84.3 million (12/2014: EUR 80.4 million) and the equity
ratio stood at 53.7 (12/2014: 51.5) per cent. Net gearing was 16.6 per cent
(12/2014: 30.3 cent). Cash and cash equivalents totalled EUR 6.7 million at
period end (12/2014: EUR 5.1 million).
Interest-bearing liabilities amounted to EUR 13.5 (12/2014: 16.2) million at
the period end. These consisted of EUR 12.0 million in loans from financial
institutions and EUR 1.5 million in financial leasing liabilities.
Consolidated net cash flow from operating activities for the period was EUR 6.7
million (1-12/2014: EUR 1.8 million). Cash flow from investments for the period
was negative by EUR 1.4 million (1-12/2014: negative by EUR 1.2 million). Cash
flow from finance for the period was negative by EUR 3.8 million (1-12/2014
negative by EUR 2.2 million).
The Group’s investments in fixed assets during the period totalled EUR 1.5
(1.1) million.
Return on investment (ROI) for the period was 15.6 (9.0) per cent, and return
on equity (ROE) was 13.5 (7.8) per cent.
The Group carries out annual impairment testing of goodwill and intangible
assets with an indefinite useful life.
The table below shows the distribution of goodwill and values subject to
testing at the end of the reporting period:
EUR 1,000 Specified Amortisations Goodwi Other Total value
intangible during the ll items subject to
assets reporting period testing
--------------------------------------------------------------------------------
Digia, 334 490 37,987 5,800 44,121
domestic
business
--------------------------------------------------------------------------------
EUR 1,000 Specified Amortisations during Goodwi Other Total value
intangible the reporting period ll items subject to
assets testing
--------------------------------------------------------------------------------
Digia, Qt 5,647 564 6,562 1,959 14,168
business
--------------------------------------------------------------------------------
EUR 1,000 Specified Amortisations during Goodwi Other Total value
intangible the reporting period ll items subject to
assets testing
--------------------------------------------------------------------------------
Digia 5,981 1,053 44,550 7,759 58,289
Group,
total
--------------------------------------------------------------------------------
Present values for domestic operations were calculated for the five-year
forecast period based on the following assumptions: Net sales and operating
profit for 2016 according to budget; after this, annual growth in net sales of
3.0 per cent and in operating profit of 8.0 per cent, and a pre-tax discount
rate of 8.5 per cent. Post-forecast-period cash flows were extrapolated using
the same assumptions as for the forecast period.
According to a sensitivity analysis, the goodwill related to domestic
operations requires either net sales to remain at the current level with
profitability at 2.8 per cent, or a 3.0 per cent growth in net sales with
profitability at 2.5 per cent. The management sees no risk of goodwill
impairment associated with domestic operations.
Present values for the Qt business were calculated for the five-year forecast
period based on the following assumptions: Net sales and operating profit for
2016 according to budget; after this, annual growth in net sales of 10.0 per
cent and in operating profit of 3 per cent, and a pre-tax discount rate of 8.5
per cent. Post-forecast-period cash flows were extrapolated using the same
assumptions as for the forecast period.
According to a completed sensitivity analysis, the goodwill of the Qt business
requires either net sales to remain at the current level with profitability at
5 per cent, or a 5.5 per cent growth in net sales with profitability at 0 per
cent. The management sees no risk of goodwill impairment associated with Qt
operations.
PERSONNEL, MANAGEMENT AND ADMINISTRATION
At the end of the period, the total number of Group personnel was 944,
representing an increase of 12 employees or 1.3 per cent since the end of the
2014 fiscal period (12/2014: 932). During the review period, the number of
employees averaged 932, a decrease of 3 employees, or -0.3 per cent, on the
2014 average (2014: 935).
Employees by function at the end of the period:
Domestic segment 76 %
-----------------------------------
Qt segment 20 %
-----------------------------------
Administration and management 4 %
-----------------------------------
As of the end of the period, 145 (12/2014: 146) employees were working abroad.
The Digia Plc Annual General Meeting of 12 March 2015 re-elected Päivi
Hokkanen, Robert Ingman, Pertti Kyttälä, Seppo Ruotsalainen, Leena Saarinen and
Tommi Uhari as members of the Board. Kai Öistämö was elected as a new member.
At the Board's organisation meeting, Pertti Kyttälä was elected Chairman of the
Board and Robert Ingman was elected Vice Chairman.
Juha Varelius has been Digia Plc’s President and CEO since 1 January 2008.
On 12 March 2015, KMPG Oy Ab, Authorised Public Accountants, was elected as the
Group's new auditor with Authorised Public Accountant Virpi Halonen as the
principal auditor.
RISKS AND UNCERTAINTIES
Short-term uncertainties are related to any major changes occurring in the
company’s core business areas.
If prolonged, the downward trend in the global economy may affect customers’
investment decisions and liquidity, and thereby the company’s sales and
profits. Signs of the impact of the global economy on customers’ investment
decisions and the schedules of planned projects appeared steadily throughout
the period under review.
Furthermore, the growth in customer project sizes is increasing the risks
related to projects and their profitability.
Risks and their management are described on the company’s website at
www.digia.com.
The planned demerger of Digia and the stock exchange listing of Qt involve
certain risks which, if materialised, may affect Digia's operations, financial
position, financial result and share value. These risks will be discussed in
more detail in a demerger prospectus to be published.
FUTURE PROSPECTS
In 2016, Digia will invest in building better growth opportunities for both
business segments. Besides pursuing organic growth, Digia will actively seek
potential acquisitions to support its strategy and to accelerate domestic
business growth.
Digia believes digitalisation, the growing popularity of multi-channel services
and the revolution in business models involve major business opportunities. To
fully tap into these opportunities, Digia will make determined investments in
personnel recruitment and training, and in improving its offering. Overall,
Digia expects to hire approximately 150 new employees, most of them in the
domestic business.
Digia expects overall demand to remain moderate in the domestic segment and
anticipates continued net sales growth in 2016. The outlook is considered
particularly positive in the first half. Profit performance in domestic
operations in 2016 is anticipated to remain on more or less the same level as
last year.
Considering the time of year and general market situation, demand for the Qt
segment's services is at a moderate level, and the long-term business outlook
is promising. The company will continue to introduce changes to open source
code licensing in forthcoming versions of its Qt software. These changes are
aimed at promoting licence sales to commercial players.
Qt business development efforts will particularly focus on embedded systems in
the automotive sector, digital TV and industrial automation. Areas targeted in
product development include value-added features and tools required for
building embedded systems.
Sales growth associated with embedded systems will also reflect on the earnings
logic. Licence revenue from these sales accumulates over the long term, as
opposed to one-off licence payments. Consequently, Digia anticipates no major
impact from embedded systems sales growth on Qt's net sales in 2016.
Digia expects to see Qt's net sales growth in 2016 be at least in line with the
general systems software development market growth rate, but growth is likely
to slow down from the extremely strong figures recorded last year. In 2016, the
exceptional licence deal agreed with Nokia Corporation in connection with the
acquisition of the Qt business in 2012 will no longer generate any net sales
for Digia, unlike in 2015 when approximately EUR 1.4 million was recorded in
net sales.
Exchange rate fluctuations, particularly between the US dollar and euro, may
have a large impact on Qt's net sales development in the future, but Digia
estimates that this effect will be less significant in 2016 than a year
earlier. Another factor contributing to considerable fluctuation in quarterly
net sales and profitability in particular is contract turnaround times which,
in the major customer segment, are very long at up to 18 months.
Digia's planned demerger and the resulting establishment of Qt as an
independent, public listed company involves considerable expenses, some
non-recurring and others continuing. If the demerger goes ahead, these will tax
the profitability of the Qt business in the future. Digia estimates that,
following the demerger, Qt will record a loss in 2016, but will gradually
improve its performance, driven by positive net sales development. However,
investments in sales work and thereby in better growth opportunities will
continue to affect profit performance in the future.
OTHER MAJOR EVENTS OF THE REVIEW PERIOD
Digia Plc’s Annual General Meeting (AGM) was held on 12 March 2015. The AGM
adopted the financial statements for 2014, released the Board members and the
CEO from liability, determined the Board and auditor fees, resolved to keep the
number of Board members at seven (7), elected the company’s Board of Directors
for a new term, and elected a new auditor.
With regard to profit distribution for 2014, the AGM approved the Board’s
proposal to pay a dividend of EUR 0.05 per share to all shareholders listed in
the shareholder register maintained by Euroclear Finland Ltd on the
reconciliation date of 16 March 2015. The dividend payment date was set at 23
March 2015.
The AGM granted the following authorisations to the Board:
Authorisation of the Board of Directors to decide on buying back own shares
and/or accepting them as collateral
The AGM authorised the Board to decide on the buyback and/or acceptance as
collateral of no more than 2,000,000 shares in the company. This buyback can
only be executed by means of the company’s unrestricted equity. The Board shall
decide on how these shares are to be bought. Own shares may be bought back in
disproportion to the holdings of the shareholders. The authorisation also
includes acquisition of shares through public trading organised by NASDAQ OMX
Helsinki Oy in accordance with the rules and instructions of NASDAQ OMX
Helsinki and Euroclear Finland Ltd, or through offers made to shareholders.
Shares may be acquired in order to improve the company’s capital structure, to
fund acquisitions or other business transactions, for offering share-based
incentive schemes, to sell on, or to be annulled. The shares must be acquired
at the market price in public trading. This authorisation supersedes that
granted by the AGM of 11 March 2014 and is valid for 18 months, i.e. until 12
September 2016.
Authorising the Board of Directors to decide on a share issue and granting of
special rights
The AGM authorised the Board to decide on an ordinary or bonus issue of shares
and the granting of special rights (as defined in Section 1, Chapter 10 of the
Limited Liability Companies Act) in one or more instalments, as follows: The
issue may total 4,000,000 shares at a maximum. The authorisation applies both
to new shares and to treasury shares held by the company. By virtue of the
authorisation, the Board has the right to decide on share issues and the
granting of special rights, in deviation from the pre-emptive subscription
rights of the shareholders (a directed issue). The authorisation may be used to
fund or complete acquisitions or other business transactions, for offering
share-based incentive schemes, to develop the company’s capital structure, or
for other purposes. The Board was authorised to decide on all terms related to
the share issue or special rights, including the subscription price, its
payment in cash or (partly or wholly) in capital contributed in kind or its
being written off against the subscriber’s receivables, and its recognition in
the company's balance sheet. This authorisation supersedes that granted by the
AGM of 11 March 2014 and is valid for 18 months, i.e. until 12 September 2016.
Digia explores possibilities of a spin-off to form two distinct listed companies
On 28 August 2015, Digia Plc announced that its Board of Directors had decided
to explore a possible spin-off that would separate its domestic and Qt
businesses and create two distinct companies, with identical ownership, listed
on NASDAQ OMX Helsinki.
The purpose of the arrangement would be to enable both businesses to focus on
maximising their respective business opportunities in line with their strategy
and creating further added value for shareholders.
On 16 December 2015, Digia's Board of Directors approved a partial demerger
plan. According to the demerger plan, the demerger will involve the transfer of
all assets and liabilities related to Digia's Qt business to the new company
formed as a result of the demerger: Qt Group Plc. Digia's Domestic operations
will remain with Digia.
The demerger and the demerger plan will be presented for approval at the Digia
Plc Annual General Meeting scheduled for 16 March 2016.
The demerger will enter into force after the Annual General Meeting approves
the demerger and the demerger plan, and the implementation is recorded in the
trade register. The planned registration date is 1 May 2016. If the demerger
enters into force, Digia's President and CEO Juha Varelius will become the
President and CEO of Qt Group Plc. The new CEO of Digia Plc will be Timo
Levoranta, M.Sc.(Tech.), B.Sc. (Econ. & Bus.Adm.),(born 1965).
SHARE CAPITAL AND SHARES
On 31 December 2015, the number of Digia Plc shares totalled 20,875,645.
According to Finnish Central Securities Depository Ltd, Digia had 4,241
shareholders on 31 December 2015.
The ten major shareholders were:
Shareholder Percentage of shares and votes
--------------------------------------------------------------------------
Ingman Development Oy Ab 20.6%
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Ilmarinen Mutual Pension Insurance Company 14.6%
--------------------------------------------------------------------------
Jyrki Hallikainen 7.4%
--------------------------------------------------------------------------
Kari Karvinen 5.2%
--------------------------------------------------------------------------
Varma Mutual Pension Insurance Company 4.6%
--------------------------------------------------------------------------
Matti Savolainen 4.3%
--------------------------------------------------------------------------
Aktia Capital investment fund 1.4%
--------------------------------------------------------------------------
Fim Fenno Sek 1.4%
--------------------------------------------------------------------------
Investment Fund Säästöpankki Small Cap 1.3%
--------------------------------------------------------------------------
Aktia Nordic Small Cap investment fund 1.3%
--------------------------------------------------------------------------
Distribution of holdings by number of shares held on 31 Dec 2015
Number of shares Shareholders Percentage of shares and votes
-------------------------------------------------------------------
1 – 100 25.9% 0.3%
-------------------------------------------------------------------
101 – 1,000 56.3% 5.0%
-------------------------------------------------------------------
1,001 – 10,000 15.6% 8.6%
-------------------------------------------------------------------
10,001 – 100,000 1.6% 11.7%
-------------------------------------------------------------------
100,001 – 1,000,000 0.5% 26.6%
-------------------------------------------------------------------
1,000,001 – 4,000,000 0.1% 47.7%
-------------------------------------------------------------------
Shareholding by sector on 31 December 2015
Shareholders Shares
--------------------------------------------------------------------
Non-financial corporations 4.2% 27.6%
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Financial and insurance corporations 0.4% 8.3%
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General government 0.1% 19.2%
--------------------------------------------------------------------
Not-for-profit institutions serving households 0.2% 2.2%
--------------------------------------------------------------------
Households 94.5% 40.7%
--------------------------------------------------------------------
Foreign holding 0.7% 2.0%
--------------------------------------------------------------------
The weighted average number of shares during the reporting period, adjusted for
share issues, came to 20,768,097 in total. The number of outstanding shares at
the end of the review period was 20,741,144.
Digia Plc held a total of 57,372 treasury shares at the end of the review
period. The accounting counter value of these treasury shares is EUR 0.10 per
share. The company held about 0.6 per cent of the capital stock as of 31
December 2015. Digia has financed the acquisition of 121,000 treasury shares
for distribution through incentive schemes for key personnel. During the
period, 43,871 such shares were distributed. At the end of the period, 77,129
of these shares remained undistributed and were under the management of Evli
Alexander Management Ltd.
REPORTED SHARE PERFORMANCE ON THE HELSINKI STOCK EXCHANGE
Digia Plc shares are listed on the NASDAQ OMX Nordic Exchange under IT, IT
Consulting & Other Services. The company's short name is DIG1V. The lowest
reported share quotation was EUR 2.74 and the highest was EUR 7.47. The share
officially closed at EUR 7.01 on the last trading day. The trade-weighted
average was EUR 4.05. The Group’s market capitalisation totalled EUR
146,338,271 at the end of the period.
The company received the following flagging notifications during the review
period:
- On 26 February 2015, the Ingman Group announced that, as a result of
internal restructuring, the Ingman Group had divested its entire holding in
Digia Plc to Ingman Development Oy Ab. As a result of the transaction, the
Ingman Group's holding in Digia Plc has fallen under the 5% flagging threshold
and Ingman Development Oy Ab's holding has risen by a corresponding amount over
the 20% flagging threshold, that is, to 20.21 per cent of the company's shares
and voting rights.
STOCK OPTION SCHEMES
Digia Plc had no outstanding options.
Helsinki, 4 February 2016
Digia Plc
Board of Directors
BRIEFING
Digia will hold a briefing on this Financial Statements for analysts on
Thursday 4 February 2016 at 11:00 am, in the Tapiola cabinet of Hotel Scandic
Simonkenttä, Simonkatu 9, 00100 Helsinki, Finland. Welcome.
FURTHER INFORMATION
Juha Varelius, CEO, tel. +358 (0)10 313 3000 (exchange)
The financial statement release and CEO’s presentation will be available in the
Investors section at www.digia.com from 11 am on 4 February 2016.
Digia Plc's electronic Annual Report for 2015 will be published on 16 February
2016 on the company website at www.digia.com and at annualreport2015.digia.com.
The Board of Directors' report and the financial statements for 2015 will be
published as part of the Annual Report.
DISTRIBUTION
NASDAQ OMX Helsinki
Key media
CONDENSED FINANCIAL STATEMENTS AND NOTES
Consolidated Income Statement
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Consolidated Statement of Changes in Shareholders’ Equity
Notes to the accounts
CONSOLIDATED INCOME STATEMENT, EUR 1,000
EUR 1,000 10-12/201 10-12/201 Change 1-12/2015 1-12/2014 Change
5 4 , % , %
--------------------------------------------------------------------------------
NET SALES 30,566.7 27,246.4 12.2% 107,880.1 97,433.5 10.7%
--------------------------------------------------------------------------------
Other operating 628.9 276.6 127.3% 2,248.2 1,302.9 72.6%
income
--------------------------------------------------------------------------------
Materials and -3,484.4 -2,819.6 23.6% -10,155.4 -9,501.1 6.9%
services
--------------------------------------------------------------------------------
Depreciation, -614.3 -600.5 2.3% -2,561.2 -2,490.4 2.8%
amortisation and
impairment
--------------------------------------------------------------------------------
Other operating -24,968.6 -21,794.4 14.6% -89,771.0 -82,435.0 8.9%
expenses
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit 2,128.2 2,308.5 -7.8% 7,640.8 4,309.8 77.3%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial expenses -187.7 -164.6 14.0% -708.9 -675.6 4.9%
(net)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings before tax 1,940.5 2,143.9 -9.5% 6,931.8 3,634.2 90.7%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -494.0 -463.3 6.6% -1,704.2 -783.8 117.4%
--------------------------------------------------------------------------------
NET PROFIT 1,446.5 1,680.6 -13.9% 5,227.6 2,850.4 83.4%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive
income:
--------------------------------------------------------------------------------
Items which may be
reclassified
subsequently to
profit or loss:
--------------------------------------------------------------------------------
Exchange differences 45.8 -72.3 91.1 -116.6
on translation of
foreign operations
--------------------------------------------------------------------------------
TOTAL COMPREHENSIVE 1,492.3 1,608.3 -7.2% 5,318.7 2,733.8 94.6%
INCOME
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of net
profit:
--------------------------------------------------------------------------------
Parent-company 1,446.5 1,680.6 -13.9% 5,227.6 2,850.4 83.4%
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of
total comprehensive
income:
--------------------------------------------------------------------------------
Parent-company 1,492.3 1,608.3 -7.2% 5,318.7 2,733.8 94.6%
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, 0.07 0.08 0.25 0.14
EUR
--------------------------------------------------------------------------------
Earnings per share 0.07 0.08 0.25 0.14
(diluted), EUR
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET, EUR 1,000
Assets 31 Dec 2015 31 Dec 2014 Change, %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Intangible assets 51,035.4 52,309.0 -2.4%
--------------------------------------------------------------------------------
Tangible assets 1,859.1 1,698.6 9.4%
--------------------------------------------------------------------------------
Financial assets 627.0 627.0 0.0%
--------------------------------------------------------------------------------
Long-term receivables 29.7 26.0 14.2%
--------------------------------------------------------------------------------
Deferred tax assets 293.3 201.2 45.7%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total non-current assets 53,844.4 54,861.8 -1.9%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Current receivables 23,741.1 20,399.3 16.4%
--------------------------------------------------------------------------------
Available-for-sale financial assets 330.6 328.7 0.6%
--------------------------------------------------------------------------------
Cash and cash equivalents 6,379.2 4,803.3 32.8%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total current assets 30,450.9 25,531.3 19.3%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 84,295.3 80,393.1 4.9%
--------------------------------------------------------------------------------
Shareholders’ equity and liabilities 31 Dec 2015 31 Dec 2014 Change, %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Share capital 2,087.6 2,087.6 0.0%
--------------------------------------------------------------------------------
Issue premium fund 7,899.5 7,899.5 0.0%
--------------------------------------------------------------------------------
Other reserves 5,203.8 5,203.8 0.0%
--------------------------------------------------------------------------------
Unrestricted shareholders’ equity reserve 31,370.3 31,370.3 0.0%
--------------------------------------------------------------------------------
Translation difference 492.1 401.0 22.7%
--------------------------------------------------------------------------------
Retained earnings -11,393.6 -13,093.8 13.0%
--------------------------------------------------------------------------------
Net profit 5,227.6 2,850.4 83.4%
--------------------------------------------------------------------------------
Equity attributable to parent-company 40,887.2 36,718.7 11.4%
shareholders
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total shareholders’ equity 40,887.2 36,718.7 11.4%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities
--------------------------------------------------------------------------------
Long-term interest-bearing liabilities 8,195.9 9,646.4 -15.0%
--------------------------------------------------------------------------------
Received long-term advances 874.6 1,113.5 -21.5%
--------------------------------------------------------------------------------
Deferred tax liabilities 253.9 288.5 -12.0%
--------------------------------------------------------------------------------
Total long-term liabilities 9,324.4 11,048.4 -15.6%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Short-term interest-bearing liabilities 5,316.8 6,599.0 -19.4%
--------------------------------------------------------------------------------
Other short-term liabilities 28,766.8 26,026.9 10.5%
--------------------------------------------------------------------------------
Total short-term liabilities 34,083.7 32,625.9 4.5%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 43,408.1 43,674.4 -0.6%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders’ equity and liabilities 84,295.3 80,393.1 4.9%
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000
1 Jan 2015-31 Dec 1 Jan 2014-31 Dec
2015 2014
--------------------------------------------------------------------------------
Cash flow from operations:
--------------------------------------------------------------------------------
Net profit 5,228 2,850
--------------------------------------------------------------------------------
Adjustments to net profit 3,254 1,054
--------------------------------------------------------------------------------
Change in working capital -1,200 -1,537
--------------------------------------------------------------------------------
Interest paid -375 -420
--------------------------------------------------------------------------------
Interest income 5 0
--------------------------------------------------------------------------------
Taxes paid -233 -123
--------------------------------------------------------------------------------
Net cash flow from operations 6,679 1,824
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from investments:
--------------------------------------------------------------------------------
Purchases of tangible and intangible -1,420 -1,185
assets
--------------------------------------------------------------------------------
Cash flow from investments -1,420 -1,185
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing:
--------------------------------------------------------------------------------
Proceeds from share issue 0 0
--------------------------------------------------------------------------------
Payments of finance lease liabilities 267 -137
--------------------------------------------------------------------------------
Repayments of current loans -3,000 0
--------------------------------------------------------------------------------
Repayments of non-current loans 0 -4,698
--------------------------------------------------------------------------------
Withdrawals of current loans 0 3,000
--------------------------------------------------------------------------------
Withdrawals of non-current loans 0 1,758
--------------------------------------------------------------------------------
Dividends paid and other profit -1,039 -2,078
distribution
--------------------------------------------------------------------------------
Cash flow from financing -3,772 -2,155
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in liquid assets 1,486 -1,515
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liquid assets at beginning of period 5,132 6,454
--------------------------------------------------------------------------------
Net foreign exchange difference 91 194
--------------------------------------------------------------------------------
Change in liquid assets 1,486 -1,515
--------------------------------------------------------------------------------
Liquid assets at end of period 6,710 5,132
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY, EUR 1,000
a b c d e f g h
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY, 1 2,088 0 7,899 33,448 5,204 518 -13,096 36,061
Jan 2014
--------------------------------------------------------------------------------
Net profit 2,850 2,850
--------------------------------------------------------------------------------
Other comprehensive -117 -117
income
--------------------------------------------------------------------------------
Repayment of capital -2,078 -2,078
--------------------------------------------------------------------------------
Share-based payments 2 2
recognised against
equity
--------------------------------------------------------------------------------
BALANCE 31 Dec 2014 2,088 0 7,899 31,370 5,204 401 -10,243 36,719
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
a b c d e f g h
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY, 1 2,088 0 7,899 31,370 5,204 401 -10,243 36,719
Jan 2015
--------------------------------------------------------------------------------
Net profit 5,228 5,228
--------------------------------------------------------------------------------
Other comprehensive 91 91
income
--------------------------------------------------------------------------------
Dividends -1,039 -1,039
--------------------------------------------------------------------------------
Share-based payments -111 -111
recognised against
equity
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY 31 2,088 0 7,899 31,370 5,204 492 -6,166 40,887
Dec 2015
--------------------------------------------------------------------------------
a = share capital
b = rights issue
c = share premium
d = unrestricted invested shareholders’ equity
e = other reserves
f = currency translation differences
g = retained earnings
h = total shareholders’ equity
NOTES TO THE ACCOUNTS
Accounting principles:
The financial statement release was prepared in compliance with IFRS and the
IAS 34 standard.
Otherwise, the the same accounting principles have been applied as in the 2014
financial statements. The amendments to and interpretations of IFRS standards
effective as of 1 January 2015 had no material effect on this Financial
Statements bulletin.
Seasonal nature of business:
The Group's business is affected by the number of workdays each month, as well
as by holiday seasons.
Dividends paid:
Dividends paid during the reporting period totalled EUR 1,038,763.65.
Related-party transactions:
Digia Group’s related parties include the CEO and the members of the Board of
Directors and Group Management, their related parties and their controlled
entities. Transactions related to the sale of services to related parties
totalled EUR 7,200 (EUR 0 in 2014). Transactions associated with the purchase
of goods or services totalled EUR 0 (EUR 0 in 2014).
Segment information:
Digia’s business operations are divided into two main business segments:
Domestic and Qt.
Events after the financial year:
There have been no significant events after the close of the financial year
2015.
NET SALES, EUR 10-12/201 10-12/201 Change, % 1-12/201 1-12/201 Change, %
1,000 5 4 5 4
--------------------------------------------------------------------------------
Domestic 23,184 21,401 8.3% 80,946 77,028 5.1%
operations
--------------------------------------------------------------------------------
Qt segment 7,382 5,845 26.3% 26,934 20,406 32.0%
--------------------------------------------------------------------------------
Digia Group 30,567 27,246 12.2% 107,880 97,433 10.7%
--------------------------------------------------------------------------------
OPERATING PROFIT BEFORE 10-12/2 10-12/2 Change 1-12/2 1-12/2 Change
EXTRAORDINARY ITEMS, EUR 015 014 , % 015 014 , %
1,000
--------------------------------------------------------------------------------
Domestic operations 2,042 2,695 -24.2% 6,479 6,311 2.7%
--------------------------------------------------------------------------------
Qt segment 147 -235 1,923 -1,850
--------------------------------------------------------------------------------
Digia Group 2,188 2,460 -11.0% 8,402 4,461 88.3%
--------------------------------------------------------------------------------
OPERATING PROFIT, 10-12/20 10-12/20 Change, 1-12/201 1-12/201 Change,
EUR 1,000 15 14 % 5 4 %
--------------------------------------------------------------------------------
Domestic operations 2,042 2,695 -24.2% 5,858 6,311 -7.2%
--------------------------------------------------------------------------------
Qt segment 87 -386 1,786 -2,001
--------------------------------------------------------------------------------
Digia Group 2,128 2,309 -7.8% 7,641 4,310 77.3%
--------------------------------------------------------------------------------
ASSETS, EUR 1,000 31 Dec 2015 31 Dec 2014
-------------------------------------------
Domestic segment 53,007 51,076
-------------------------------------------
Qt segment 18,232 17,332
-------------------------------------------
Unallocated 13,056 11,985
-------------------------------------------
Digia Group 84,295 80,393
-------------------------------------------
Consolidated income statement by quarter:
EUR 1,000 10-12/201 7-9/2015 4-6/2015 1-3/2015 10-12/201
5 4
--------------------------------------------------------------------------------
Net sales 30,566.7 24,552.5 27,109.2 25,651.7 27,246.4
--------------------------------------------------------------------------------
Other operating income 628.9 771.4 424.8 423.1 276.6
--------------------------------------------------------------------------------
Materials and services -3,484.4 -2,020.0 -2,358.3 -2,292.7 -2,819.6
--------------------------------------------------------------------------------
Depreciation, -614.3 -675.9 -655.6 -615.3 -600.5
amortisation and
impairment
--------------------------------------------------------------------------------
Other operating expenses -24,968.6 -20,112.8 -22,212.5 -22,477.0 -21,794.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit 2,128.2 2,515.2 2,307.6 689.8 2,308.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial expenses (net) -187.7 -40.7 -176.8 -303.8 -164.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings before tax 1,940.5 2,474.5 2,130.8 386.0 2,143.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -494.0 -623.7 -472.9 -113.7 -463.3
--------------------------------------------------------------------------------
Net profit 1,446.6 1,850.9 1,657.8 272.3 1,680.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of net
profit:
--------------------------------------------------------------------------------
Parent-company 1,446.6 1,850.9 1,657.8 272.3 1,680.6
shareholders
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR 0.07 0.09 0.08 0.01 0.08
--------------------------------------------------------------------------------
Earnings per share 0.07 0.09 0.08 0.01 0.08
(diluted), EUR
--------------------------------------------------------------------------------
Group key figures and ratios:
EUR 1,000 1-12/2015 1-12/2014
--------------------------------------------------------------------------------
Extent of business:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 107,880 97,433
--------------------------------------------------------------------------------
- change from previous year 10.7% -2.3%
--------------------------------------------------------------------------------
Average capital invested 53,698 52,954
--------------------------------------------------------------------------------
Personnel at period end 944 932
--------------------------------------------------------------------------------
Average number of personnel 932 935
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profitability:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit before extraordinary items and impairment 8,399 4,461
--------------------------------------------------------------------------------
- % of net sales 7.8% 4.6%
--------------------------------------------------------------------------------
Operating profit 7,641 4,310
--------------------------------------------------------------------------------
- % of net sales 7.1% 4.4%
--------------------------------------------------------------------------------
Earnings before tax 6,932 3,634
--------------------------------------------------------------------------------
- % of net sales 6.4% 3.7%
--------------------------------------------------------------------------------
Net profit 5,228 2,850
--------------------------------------------------------------------------------
- % of net sales 4.8% 2.9%
--------------------------------------------------------------------------------
Return on equity, % 13.5% 7.8%
--------------------------------------------------------------------------------
Return on investment, % 15.6% 9.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financing and financial standing:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Interest-bearing liabilities 13,513 16,245
--------------------------------------------------------------------------------
Short-term investments & cash and bank receivables 6,710 5,132
--------------------------------------------------------------------------------
Net gearing 16.6% 30.3%
--------------------------------------------------------------------------------
Equity ratio 53.7% 51.5%
--------------------------------------------------------------------------------
Net cash flow from operations 6,679 1,824
--------------------------------------------------------------------------------
Earnings per share, undiluted EUR 0.25 0.14
--------------------------------------------------------------------------------
Earnings per share, diluted EUR 0.25 0.14
--------------------------------------------------------------------------------
Equity/share, EUR 1.96 1.76
--------------------------------------------------------------------------------
Lowest share trading price, EUR 2.74 2.66
--------------------------------------------------------------------------------
Highest share trading price, EUR 7.47 4.59
--------------------------------------------------------------------------------
Average share price, EUR 4.05 3.79
--------------------------------------------------------------------------------
Market capitalisation 146,338 55,529
--------------------------------------------------------------------------------
Formulae for key figures and ratios are presented in the 2014 financial
statements. These remained unchanged during the reporting period.
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