2013-10-29 11:30:00 CET
2013-10-29 11:30:03 CET
REGULATED INFORMATION
Affecto Oyj - Interim report (Q1 and Q3)
Affecto Plc's Interim report 1-9/2013
Helsinki, 2013-10-29 11:30 CET (GLOBE NEWSWIRE) -- AFFECTO PLC -- INTERIM
REPORT -- 29 OCTOBER 2013 at 12.30
Affecto Plc's Interim report 1-9/2013
Group key figures
MEUR 7-9/13 7-9/12 1-9/13 1-9/12 2012 Last 12m
Net sales 27.5 28.4 96.7 95.1 133.4 135.0
Operational segment result 2.5 1.7 7.5 7.5 12.5 12.6
% of net sales 9.0 6.1 7.8 7.9 9.4 9.3
Operating profit 2.0 1.2 6.0 5.9 10.5 10.5
% of net sales 7.1 4.2 6.2 6.2 7.8 7.8
Profit before taxes 2.0 1.3 5.8 5.8 10.0 10.1
Profit for the period 1.4 0.9 4.1 4.3 7.6 7.4
Equity ratio, % 55.5 51.7 55.5 51.7 50.6 -
Net gearing, % 19.8 29.7 19.8 29.7 15.8 -
Earnings per share, eur 0.07 0.04 0.20 0.21 0.37 0.35
Earnings per share (diluted), 0.07 0.04 0.19 0.20 0.36 0.35
eur
Equity per share, eur 3.16 3.10 3.16 3.10 3.24 -
CEO Pekka Eloholma comments:
We grew during the third quarter in most of the countries, but decreases in
Baltic and Denmark pushed our net sales down by 3% to 27.5 MEUR (28.4 MEUR).
Net sales grew by 5% in Finland, by 4% in Norway and by 9% in Sweden, and
decreased by 17% in Denmark and 27% in Baltic. In a challenging market
situation we managed to slightly grow in our Nordic main market.
Operating profit grew significantly to 2.0 MEUR (1.2 MEUR) and profitability
increased to 7% (4%). Despite the holiday season, the profitability in Finland
and Denmark was excellent 15-16%. We made a positive 1% margin in Sweden in the
typically weakest quarter of the year, which strengthens my belief that after a
long period of difficulties we are finally reaching sustainable profitability
also in Sweden. Profitability in Baltic was 0% reflecting the slow market
especially in Lithuania.
After nine months, we are slightly ahead last year regarding both net sales and
operating profit. The general economic sentiment seems to be picking up in
Sweden and Denmark. In Finland the sentiment has remained subdued, which has
naturally also caused postponements to our customers' investment plans. Order
backlog decreased to 45.0 MEUR (46.5 MEUR), as customers slowed down their
decision making and made investment decisions in smaller lots than earlier.
Additionally, the weak predictability of license deals typical to the fourth
quarter weakens the short-term visibility especially in the current market
conditions.
Due to the uncertain market conditions we have decreased our growth
expectations and currently expect net sales to be near last year's level
instead of previously expected slight growth.
Year 2013 net sales and operating profit are estimated to be near last year's
level.
Previous guidance: Net sales are estimated to grow in 2013. Operating profit is
estimated to be near last year's level.
Additional information:
CEO Pekka Eloholma, +358 205 777 737
CFO Satu Kankare, +358 205 777 202
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
This release is unaudited. The amounts in this report have been rounded from
exact numbers.
NET SALES
Affecto's net sales in 1-9/2013 were 96.7 MEUR (1-9/2012: 95.1 MEUR). Net sales
in Finland were 38.3 MEUR (37.9 MEUR), in Norway 22.2 MEUR (19.2 MEUR), in
Sweden 17.0 MEUR (16.7 MEUR), in Denmark 11.2 MEUR (11.1 MEUR) and 11.5 MEUR
(12.4 MEUR) in Baltic.
Net sales by reportable segments
Net sales, MEUR 7-9/13 7-9/12 1-9/13 1-9/12 2012 Last 12m
Finland 11.3 10.7 38.3 37.9 52.6 53.0
Norway 6.2 5.9 22.2 19.2 27.2 30.2
Sweden 4.7 4.3 17.0 16.7 24.0 24.3
Denmark 3.1 3.8 11.2 11.1 16.0 16.2
Baltic 3.3 4.6 11.5 12.4 16.7 15.8
Other -1.1 -0.8 -3.5 -2.1 -3.0 -4.4
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Group total 27.5 28.4 96.7 95.1 133.4 135.0
Net sales decreased by 3% in the third quarter, as net sales in Baltic
decreased 27% mainly due to the slowed market in Lithuania and in Denmark by
17% due to normal quarterly fluctuation. On the other hand, Sweden grew by 9%,
Finland by 5% and Norway by 4%, so we managed to grow in the Nordic main market
as a whole.
Net sales of Information Management Solutions business in 1-9/2013 were 90.1
MEUR (87.4 MEUR) and net sales of Karttakeskus GIS business were 8.8 MEUR (8.7
MEUR).
Customers' interest was 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. On the other hand the Swedish
and Danish markets have picked up somewhat. The order backlog decreased to 45.0
MEUR (46.5 MEUR).
PROFIT
Affecto's operating profit in 1-9/2013 was 6.0 MEUR (5.9 MEUR) and the
operational segment result was 7.5 MEUR (7.5 MEUR). Operational segment result
was in Finland 4.9 MEUR (5.2 MEUR), in Norway 2.2 MEUR (2.0 MEUR), in Sweden
-0.3 MEUR (-1.3 MEUR), in Denmark 1.3 MEUR (0.9 MEUR) and in Baltic 0.4 MEUR
(1.5 MEUR).
Operational segment result by reportable segments
Operational segment 7-9/13 7-9/12 1-9/13 1-9/12 2012 Last 12m
result, MEUR
Finland 1.8 1.3 4.9 5.2 7.7 7.5
Norway 0.5 0.7 2.2 2.0 3.3 3.6
Sweden 0.0 -1.0 -0.3 -1.3 -0.9 0.0
Denmark 0.5 0.4 1.3 0.9 1.8 2.2
Baltic 0.0 0.6 0.4 1.5 2.0 0.9
Other -0.3 -0.2 -1.0 -0.8 -1.4 -1.6
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Operational segment result 2.5 1.7 7.5 7.5 12.5 12.6
IFRS3 Amortization -0.5 -0.5 -1.5 -1.5 -2.1 -2.1
Operating profit 2.0 1.2 6.0 5.9 10.5 10.5
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Operating profit in the third quarter increased to 2.0 MEUR (1.2 MEUR) and
profitability increased to 7% (4%). Profit improved especially in Sweden and
Finland, but also in Denmark. The largest negative impact came from Baltic, but
profit decreased also in Norway.
Profitability in Finland was at excellent 16% level in the third quarter, as
also the Karttakeskus GIS business unit returned to excellent profitability
after a weak second quarter. Profitability was also an excellent 15% in
Denmark, despite a decrease in net sales. This was impacted both by sales mix
and successful project implementations. In Baltic especially the Lithuanian
market has slowed down and a four-day work week has been partially adopted
there. Profitability in Sweden turned finally positive and was 1%, which is a
good achievement in the typically weakest quarter of the year.
According to the IFRS3 requirements, 1-9/2013 operating profit includes 1.5
MEUR (1.5 MEUR) of amortization on intangible assets related to acquisitions.
The IFRS3 amortization is estimated to be approx. 2.0 MEUR per year until 2014,
as the other intangible assets impacting in the IFRS3 amortization totaled 2.2
MEUR at the end of the reporting period.
Taxes corresponding to the profit of the period have been entered as tax
expense. Net profit for the period was 4.1 MEUR, while it was 4.3 MEUR last
year.
FINANCE AND INVESTMENTS
At the end of the reporting period Affecto's balance sheet totaled 129.2 MEUR
(12/2012: 147.9 MEUR). Equity ratio was 55.5% (12/2012: 50.6%) and net gearing
was 19.8% (12/2012: 15.8%).
The financial loans were 28.5 MEUR (12/2012: 30.5 MEUR) at the end of reporting
period. The company's cash and liquid assets were 15.2 MEUR (12/2012: 19.8
MEUR). The interest-bearing net debt was 13.2 MEUR (12/2012: 10.6 MEUR).
Cash flow from operating activities for the reported period was 2.1 MEUR (0.5
MEUR) and cash flow from investing activities was -1.4 MEUR (-0.8 MEUR).
Investments in tangible and intangible assets were 1.4 MEUR (0.8 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 1083 persons at the end of the reporting period
(1102). 436 employees were based in Finland (417), 124 in Norway (130), 146 in
Sweden (145), 71 in Denmark (74) and 306 in the Baltic countries (336). The
average number of employees during the period was 1080 (1087).
Hellen Wohlin Lidgard started as the country manager in Sweden in April. Rene
Lykkeskov returned to his role as Affecto's chief strategy officer.
REVIEW OF MARKET DEVELOPMENTS
Uncertainty about the general economic development continued to affect
Affecto's business negatively. Customers' decision-making pace was slower than
normally 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 has remained low in Baltic.
Customers' focus seems to be more on efficiency-improvement solution areas like
Master Data Management (MDM) and Corporate Performance Management (CPM) 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 BI and
analytics software license markets are approx. 6-8% in the next few years. The
corresponding Nordic service markets are estimated to grow annually by 6-8% on
average. However, market growth in 2013 will most likely be smaller.
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.
In 7-9/2013 the net sales in Finland grew by 5% to 11.3 MEUR (10.7 MEUR).
Operational segment result was 1.8 MEUR (1.3 MEUR). Profitability was 16%. The
business development was rather stable, but customers were cautious with their
orders. The increased challenges for the export industries will likely affect
IT investments negatively also in near future. Largest deal in the period was
made with the City of Helsinki regarding the maintenance of its data warehouse
and reporting systems.
In 7-9/2013 the net sales of Karttakeskus GIS business, reported as part of
Finland, increased by 16% to 3.0 MEUR (2.6 MEUR) and its profitability was
excellent. Unit's order backlog developed positively, to which the multi-year
deal with the Finnish Agency for Rural Affairs had a clear impact.
In 7-9/2013 the net sales in Norway were 6.2 MEUR (5.9 MEUR) and operational
segment result was 0.5 MEUR (0.7 MEUR). Net sales grew by 4% and profitability
was 9%. Business development was mainly stable, but customers prefer shorter
and smaller projects than earlier, which has clearly decreased the order
backlog.
In 7-9/2013 the net sales in Sweden were 4.7 MEUR (4.3 MEUR) and operational
segment result 0.0 MEUR (-1.0 MEUR). The net sales grew by 9%. Profitability
turned finally positive and was 1%, which is a good achievement in the
typically weakest quarter of the year. Development actions continue and the
goal is to achieve normal profitability, but structural and operational changes
for the business will take some time. The continuing recruitments of junior
consultants have improved cost structure.
In 7-9/2013 the net sales in Denmark were 3.1 MEUR (3.8 MEUR) and operational
segment result was 0.5 MEUR (0.4 MEUR). Net sales decreased by 17% due to
smaller license sales and decreased amount of low-margin items in the sales
mix. Profitability increased to 15% thanks to successful project
implementations. Order backlog exceeds last year's level, partially thanks to
the three-year maintenance contract announced in September.
In 7-9/2013 the net sales in Baltic (Lithuania, Latvia, Estonia, Poland, South
Africa) were 3.3 MEUR (4.6 MEUR). Operational segment result was 0.0 MEUR (0.6
MEUR). Net sales decreased by 27% and profitability decreased to 0%. The sales
mix of consultant work was less profitable than last year. Especially in
Lithuania the market has slowed down and public sector customers' launch new
projects very slowly. In order to improve profitability the Lithuanian
organization has partially adopted a 4-day work week. The situation is not
expected to improve during 2013, but the possible new funding decisions by the
European Union may improve situation next year. Also the possible entrance of
Lithuania into Euro may increase IT investments.
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 AUTHORIZATIONS GIVEN TO THE BOARD OF DIRECTORS
The Board has not used in the review period the authorizations given by the
Annual General Meeting in 2012, which authorizations expired on 9 April 2013.
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.
SHARES AND TRADING
During the review period a total of 350 667 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 21 893 735
shares. The company owned 78 427 treasury shares and Affecto Management Oy
owned 823 000 shares.
In 1-9/2013 the highest share price was 4.55 euro, the lowest price 2.98 euro,
the average price 3.82 euro and the closing price 4.00 euro. The trading volume
was 3.4 million shares, corresponding to 21% (annualized) of the number of
shares at the end of the period. The market value of shares was 87.3 MEUR at
the end of the period including the shares owned by Affecto Management Oy but
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 2800 owners on 30 September 2013 and the foreign
ownership was 13%. 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. 14.3%.
According to the flagging announcement made on 26 September 2013, the ownership
of Arendals Fossekompani ASA has decreased below 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. 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 2012.
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'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.
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.
Affecto's success depends also on good customer relationships. Affecto has a
well-diversified customer base. 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.
Affecto's bank loan has covenants, the breach of which may lead to higher
financing costs or even the termination of the loan. The covenants are based on
total net debt to earnings before interest, taxes, depreciation and
amortization and total net debt to total equity.
FUTURE OUTLOOK
Year 2013 net sales and operating profit are estimated to be near last year's
level.
Previous guidance: Net sales are estimated to grow in 2013. Operating profit is
estimated to be near last year's level.
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) 7-9/201 7-9/201 1-9/201 1-9/201 2012 Last
3 2 3 2 12m
---------------------------------------------------
---------------------------------------------------
Net sales 27 499 28 420 96 702 95 098 133 135
400 003
Other operating income - 7 7 25 221 203
Changes in inventories of -53 -25 305 -26 -94 237
finished
goods and work in progress
Materials and services -5 266 -5 866 -20 467 -18 075 -27 -29
072 464
Personnel expenses -15 222 -16 604 -54 996 -56 025 -75 -74
542 513
Other operating expenses -4 162 -3 889 -13 098 -12 552 -17 -17
106 653
Other depreciation and -327 -320 -936 -969 -1 290 -1 257
amortisation
IFRS3 amortisation -507 -525 -1 547 -1 546 -2 067 -2 068
Operating profit 1 961 1 198 5 970 5 932 10 451 10 489
Financial income and -3 88 -126 -176 -408 -358
expenses
Profit before income tax 1 959 1 287 5 844 5 756 10 042 10 130
Income tax -566 -435 -1 709 -1 431 -2 467 -2 746
Profit for the period 1 392 851 4 134 4 325 7 575 7 385
Profit for the period
attributable to:
Owners of the parent company 1 399 862 4 059 4 292 7 552 7 319
Non-controlling interest -7 -10 75 33 23 66
Earnings per share
(EUR per share):
Basic 0.07 0.04 0.20 0.21 0.37 0.35
Diluted 0.07 0.04 0.19 0.20 0.36 0.35
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
(1 000 EUR) 7-9/201 7-9/201 1-9/201 1-9/201 2012 Last
3 2 3 2 12m
---------------------------------------------------
---------------------------------------------------
Profit for the period 1 392 851 4 134 4 325 7 575 7 385
Other comprehensive income
Items that may be
reclassified subsequently
to the statement of income:
Translation difference -228 1 176 -2 045 2 046 1 723 -2 368
Total Comprehensive income 1 164 2 027 2 090 6 371 9 298 5 017
for the period
Total Comprehensive income
attributable to:
Owners of the parent company 1 171 2 038 2 014 6 338 9 275 4 951
Non-controlling interest -7 -10 75 33 23 66
CONSOLIDATED BALANCE SHEET
(1 000 EUR) 9/2013 9/2012 12/2012
--------------------------
--------------------------
Non-current assets
Property, plant and equipment 2 014 1 880 1 711
Goodwill 73 062 74 957 74 651
Other intangible assets 2 563 4 648 4 098
Deferred tax assets 1 566 1 708 1 506
Trade and other receivables 411 11 11
79 616 83 204 81 977
Current assets
Inventories 626 404 317
Trade and other receivables 32 982 35 842 45 529
Current income tax receivables 785 742 325
Cash and cash equivalents 15 211 13 307 19 767
49 604 50 295 65 937
-------------------------------------------------------------
-------------------------------------------------------------
Total assets 129 221 133 499 147 914
Equity attributable to owners
of the parent Company
Share capital 5 105 5 105 5 105
Reserve of invested non-restricted 47 354 46 619 46 643
equity
Other reserves 742 673 693
Treasury shares -2 202 -2 262 -2 202
Translation differences -1 099 1 269 946
Retained earnings 16 396 12 521 15 781
-------------------------------------------------------------
-------------------------------------------------------------
66 295 63 925 66 965
Non-controlling interest 386 320 311
Total equity 66 681 64 245 67 277
Non-current liabilities
Loans and borrowings 24 411 28 379 26 387
Deferred tax liabilities 599 1 180 987
25 011 29 559 27 374
Current liabilities
Loans and borrowings 4 000 4 000 4 000
Derivative financial instruments - 92 -
Trade and other payables 30 989 32 479 46 745
Current income tax liabilities 2 302 2 395 2 159
Provisions 238 728 359
37 529 39 694 53 263
Total liabilities 62 539 69 253 80 638
-------------------------------------------------------------
-------------------------------------------------------------
Equity and liabilities 129 221 133 499 147 914
SUMMARY CONSOLIDATED CASH FLOW STATEMENT
(1 000 EUR) 1-9/2013 1-9/2012 2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash flows from operating activities
Profit for the period 4 134 4 325 7 575
Adjustments to profit for the period 4 553 4 314 6 449
8 688 8 639 14 024
Change in working capital -3 931 -5 656 -1 340
Interest and other financial cost paid -426 -874 -1 207
Interest and other financial income received 121 114 165
Income taxes paid -2 324 -1 674 -2 525
----------------------------------------------------------------------------
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Net cash from operating activities 2 127 549 9 117
Cash flows from investing activities
Acquisition of tangible and intangible assets -1 355 -833 -1 008
Proceeds from sale of tangible and 1 14 49
intangible assets
Net cash used in investing activities -1 354 -820 -959
----------------------------------------------------------------------------
Cash flows from financing activities
Repayments of non-current borrowings -2 000 -2 000 -4 000
Acquisition of treasury shares - -266 -266
Proceeds from share options exercised 711 27 49
Acquisition of non-controlling interest - -134 -134
Dividends paid to the owners -3 444 -2 367 -2 367
of the parent company
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net cash from financing activities -4 734 -4 740 -6 718
(Decrease)/increase in cash and cash equivalents -3 961 -5 011 1 440
Cash and cash equivalents 19 767 17 964 17 964
at the beginning of the period
Foreign exchange effect on cash -595 354 363
Cash and cash equivalents 15 211 13 307 19 767
at the end of the period
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to owners of the parent
company
------------------------------------------------------
--------
(1 000 Share Reserve of Other Treasu Trans Ret. Non-cont Total
EUR) capita invested reserv ry lat. earnin rolling equity
l non-restric es shares diff. gs interest
ted equity
----------------------------------------------
Equity 5 105 46 643 693 -2 202 946 15 781 311 67 277
at 1
January
2013
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit 4 059 75 4 134
Translat -2 045 -2 045
ion
differe
nces
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total - 2 045 4 059 75 2 090
compre-
hensive
income
Share-ba 49 49
sed
payment
s
Exercise 711 711
of
share
options
Dividend -3 444 -3 444
s paid
Equity 5 105 47 354 742 -2 202 -1 099 16 396 386 66 681
at 30
Septemb
er 2013
--------------------------------------------------------------------------------
Equity attributable to owners of the parent
company
---------------------------------------------------
--------
(1 000 EUR) Share Reserve Other Treasu Trans Ret. Non-co Total
capita of reserv ry lat. earnin ntroll equity
l invested es shares diff. gs ing
non-restr intere
icted st
equity
-------------------------------------------
Equity at 1 5 105 46 591 593 -1 996 -777 10 642 376 60 535
January 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit 4 292 33 4 325
Translation 2 046 2 046
differences
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 2 046 4 292 33 6 371
compre-hensi
ve income
Share-based 80 80
payments
Exercise of 27 27
share
options
Acquisition -266 -266
of treasury
shares
Acquisition -51 -89 -140
of
non-controll
ing interest
without
changing
control
Other 6 6
movements
Dividends -2 367 -2 367
paid
Equity at 30 5 105 46 619 673 -2 262 1 269 12 521 320 64 245
September
2012
--------------------------------------------------------------------------------
2. Notes
2.1. Basis of preparation
This condensed interim financial information has been prepared in accordance
with IAS 34, Interim Financial reporting. The condensed interim financial
report should be read in conjunction with the annual financial statements for
the year ended 31 December 2012. The same accounting policies have been applied
as in the annual consolidated financial statements with the exception of the
amendments to the IFRS standards that have entered into force and have been
applied on 1 January 2013, which amendments have been presented in the previous
annual financial statements. These amendments had no material impact on this
interim report.
The non-controlling interest has been presented separately after net profit for
the period and in total equity.
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) 7-9/201 7-9/201 1-9/201 1-9/20 2012 Last
3 2 3 12 12m
----------------------------------------------------
----------------------------------------------------
Total net sales
Finland 11 253 10 709 38 287 37 890 52 570 52 967
Norway 6 160 5 904 22 234 19 158 27 161 30 237
Sweden 4 706 4 318 16 979 16 661 23 984 24 302
Denmark 3 127 3 752 11 223 11 091 16 038 16 170
Baltic 3 322 4 579 11 488 12 396 16 684 15 775
Other -1 069 -841 -3 509 -2 098 -3 036 -4 448
Group total 27 499 28 420 96 702 95 098 133 400 135 003
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Operational segment result
Finland 1 764 1 253 4 928 5 215 7 747 7 459
Norway 531 689 2 241 2 006 3 317 3 552
Sweden 27 -982 -303 -1 280 -945 32
Denmark 470 354 1 251 878 1 800 2 173
Baltic 5 608 393 1 460 1 981 913
Other -329 -198 -992 -803 -1 382 -1 572
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total operational segment 2 469 1 723 7 517 7 478 12 518 12 557
result
IFRS3 amortisation -507 -525 -1 547 -1 546 -2 067 -2 068
Operating profit 1 961 1 198 5 970 5 932 10 451 10 489
--------------------------------------------------------------------------------
Net sales by business lines
(1 000 EUR) 7-9/201 7-9/201 1-9/201 1-9/20 2012 Last
3 2 3 12 12m
----------------------------------------------------
----------------------------------------------------
Information Management 25 339 26 178 90 080 87 381 122 892 125 591
Solutions
Karttakeskus GIS business 3 037 2 619 8 769 8 725 11 884 11 928
Other -878 -377 -2 147 -1 007 -1 376 -2 516
--------------------------------------------------------------------------------
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Group total 27 499 28 420 96 702 95 098 133 400 135 003
2.3. Changes in intangible and tangible assets
(1 000 EUR) 1-9/2013 1-9/2012 1-12/2012
------------------------------
------------------------------
Carrying amount at the beginning of period 80 460 81 127 81 127
Additions 1 355 833 1 008
Disposals -1 -4 -30
Depreciation and amortization for the period - 2 483 - 2 515 - 3 357
Exchange rate differences -1 692 2 042 1 711
Carrying amount at the end of period 77 639 81 485 80 460
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2.4. Share capital, reserve of invested non-restricted equity and treasury
shares
(1 000 EUR) Number of Share Reserve of invested Treasury
shares capital non-restricted equity shares
outstanding
--------------------------------------------------------------
--------------------------------------------------------------
1.1.2012 20 693 468 5 105 46 591 -1 996
Exercise of share 14 600 - 27 -
options
Acquisition of -100 000 - - -266
treasury shares
30.9.2012 20 603 068 5 105 46 619 -2 262
1.1.2013 20 641 641 5 105 46 643 -2 202
Exercise of share 350 667 - 659 -
options
Payment for share - - 52 -
options
30.9.2013 20 992 308 5 105 47 354 -2 202
At the end of reporting period Affecto Plc owned 78 427 treasury shares. In
addition to that Affecto Management Oy, included in consolidated accounts,
owned 823 000 shares in Affecto Plc. In total these 901 427 shares correspond
to 4.1% of the total amount of the shares. The amount of registered shares was
21 893 735 shares.
2.5. Interest-bearing liabilities
(1 000 EUR) 30.9.2013 31.12.2012
Interest-bearing non-current liabilities
Loans from financial institutions, 24 411 26 387
non-current portion
Loans from financial institutions, 4 000 4 000
current portion
---------------------------------------------------------------
---------------------------------------------------------------
28 411 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) 30.9.2013 31.12.2012
Not later than one (1) year 3 495 3 966
Later than one (1) year, 4 381 6 594
but not later than five (5) years
Later than five (5) years - -
Total 7 877 10 561
--------------------------------------------------------
Guarantees given:
(1 000 EUR) 30.9.2013 31.12.2012
Liabilities secured by a mortgage
Financial loans 28 500 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) 30.9.2013 31.12.2012
Pledges 35 6
Other guarantees 2 887 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) 1-9/2013 1-9/2012 1-12/2012
Salaries and other short-term employee benefits 1 589 1 587 2 184
Post-employment benefits 222 238 279
Termination benefits -15 245 245
Share-based payments 4 10 13
------------------------------------------------------------------------------
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Total 1 800 2 080 2 721
Loans to related party:
(1 000 EUR) 30.9.2013 30.9.2012 31.12.2012
Loans to key management of the group 1 519 1 612 1 624
Purchases from related party:
(1 000 EUR) 1-9/20 1-9/20 1-12/2
13 12 012
Purchases from the entity that are controlled by key 5 - -
management personnel of the group
3. Key figures
7-9/201 7-9/201 1-9/201 1-9/201 2012 Last
3 2 3 2 12m
-----------------------------------------------------
-----------------------------------------------------
Net sales, 1 000 eur 27 499 28 420 96 702 95 098 133 400 135 003
EBITDA, 1 000 eur 2 796 2 044 8 453 8 446 13 808 13 814
Operational segment 2 469 1 723 7 517 7 478 12 518 12 557
result,
1 000 eur
Operating result, 1 000 1 961 1 198 5 970 5 932 10 451 10 489
eur
Result before taxes, 1 000 1 959 1 287 5 844 5 756 10 042 10 130
eur
Profit attributable to the 1 399 862 4 059 4 292 7 552 7 319
owners
of the parent company, 1
000 eur
EBITDA, % 10.2 % 7.2 % 8.7 % 8.9 % 10.4 % 10.2 %
Operational segment 9.0 % 6.1 % 7.8 % 7.9 % 9.4 % 9.3 %
result, %
Operating result, % 7.1 % 4.2 % 6.2 % 6.2 % 7.8 % 7.8 %
Result before taxes, % 7.1 % 4.5 % 6.0 % 6.1 % 7.5 % 7.5 %
Net income for equity 5.1 % 3.0 % 4.2 % 4.5 % 5.7 % 5.4 %
holders
of the parent company, %
Equity ratio, % 55.5 % 51.7 % 55.5 % 51.7 % 50.6 %
Net gearing, % 19.8 % 29.7 % 19.8 % 29.7 % 15.8 %
Interest-bearing net debt, 13 201 19 073 13 201 19 073 10 621
1 000 eur
Gross investment in 293 185 1 355 833 1 008
non-current
assets (excl.
acquisitions),
1 000 eur
Gross investments, % of 1.1 % 0.7 % 1.4 % 0.9 % 0.8 %
net sales
Order backlog, 1 000 eur 44 955 46 523 44 955 46 523 61 359
Average number of 1 074 1 098 1 080 1 087 1 089
employees
Earnings per share, eur 0.07 0.04 0.20 0.21 0.37 0.35
Earnings per share 0.07 0.04 0.19 0.20 0.36 0.35
(diluted),
eur
Equity per share, eur 3.16 3.10 3.16 3.10 3.24
Average number of shares, 20 992 20 604 20 802 20 651 20 642 20 741
1 000 shares
Number of shares at the 20 992 20 608 20 992 20 608 20 642 20 992
end of
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:
CEO Pekka Eloholma, +358 205 777 737
CFO Satu Kankare, +358 205 777 202
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
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