2014-04-29 11:30:00 CEST
2014-04-29 11:30:05 CEST
REGULATED INFORMATION
Affecto Oyj - Interim report (Q1 and Q3)
Affecto Plc's Interim Report 1-3/2014
Helsinki, 2014-04-29 11:30 CEST (GLOBE NEWSWIRE) -- AFFECTO PLC -- INTERIM
REPORT -- 29 APRIL 2014 at 12.30
Affecto Plc's Interim Report 1-3/2014
Group key figures
MEUR 1-3/14 1-3/13 2013 last 12m
Net sales 31.2 34.4 132.9 129.7
Operational segment result 0.1 2.6 10.3 7.8
% of net sales 0.4 7.4 7.7 6.0
Operating profit -0.4 2.0 8.3 5.8
% of net sales -1.4 5.9 6.2 4.5
Profit before taxes -0.6 2.1 8.0 5.3
Profit for the period -0.6 1.5 5.6 3.5
Equity ratio, % 56.0 54.1 53.0 -
Net gearing, % 14.1 19.0 7.4 -
Earnings per share, eur -0.03 0.07 0.26 0.16
Earnings per share (diluted), eur -0.03 0.07 0.26 0.16
Equity per share, eur 3.11 3.32 3.14 -
CEO Lars Wahlström comments:
The first quarter was difficult for us. Net sales decreased by 9% to 31.2 MEUR
(34.4 MEUR). Sales decreased somewhat in all areas, but the drop was largest in
Norway. In general, customers are still slow in investment decision making and
we see more decision postponements than really lost cases.
Some of our traditionally strong expertise areas are not growing and we are
shifting our offerings and resources to match the changing customer needs. The
streamlining actions we took in Q1 in Norway and Sweden are part of that
adjustment process and caused one-off costs of approx. 0.9 MEUR.
The streamlining actions pushed our operating profit negative and operating
profit was -0.4 MEUR (2.0 MEUR). Profitability was best in Denmark, 9%, and in
Finland, 7%.
The order backlog was 47.5 MEUR, somewhat below last year (50.5 MEUR), mainly
due to Norway. Our visibility is somewhat lower than it typically has been
which increases the uncertainty related to our forecasts.
Year 2014 net sales and operating profit are estimated to be below last year's
level.
Earlier guidance: Year 2014 net sales and operating profit are estimated to be
near last year's level.
Additional information:
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
CFO Satu Kankare, +358 205 777 202
This release is unaudited. The amounts in this report have been rounded from
exact numbers.
NET SALES
Affecto's net sales in 1-3/2014 were 31.2 MEUR (1-3/2013: 34.4 MEUR). Net sales
in Finland were 12.6 MEUR (12.8 MEUR), in Norway 6.3 MEUR (8.5 MEUR), in Sweden
5.8 MEUR (6.1 MEUR), in Denmark 3.5 MEUR (3.8 MEUR) and 4.1 MEUR (4.3 MEUR) in
Baltic.
Net sales by reportable segments
Net sales, MEUR 1-3/14 1-3/13 2013 last 12m
Finland 12.6 12.8 53.2 53.0
Norway 6.3 8.5 29.6 27.4
Sweden 5.8 6.1 23.2 22.9
Denmark 3.5 3.8 15.4 15.0
Baltic 4.1 4.3 16.0 15.9
Other -1.1 -1.0 -4.4 -4.4
------------------------------------------------
------------------------------------------------
Group total 31.2 34.4 132.9 129.7
Net sales decreased by 9% in the first quarter. Net sales decreased in all
areas, most in Norway, 26%, where also a weaker NOK contributed to the
decrease. Resource utilization was low especially in Norway and also in
Finland.
Net sales of Information Management Solutions business in 1-3/2014 were 29.1
MEUR (32.2 MEUR) and net sales of Karttakeskus GIS business were 3.0 MEUR (2.8
MEUR).
Customers' interest continues to be for short and small projects, and
investment decisions take a long time. The general market sentiment continues
cautious especially in Finland and Norway. The order backlog decreased to 47.5
MEUR (50.5 MEUR).
PROFIT
Affecto's operating profit in 1-3/2014 was -0.4 MEUR (2.0 MEUR) and the
operational segment result was 0.1 MEUR (2.6 MEUR). Operational segment result
was in Finland 0.9 MEUR (1.4 MEUR), in Norway -0.3 MEUR (0.9 MEUR), in Sweden
-0.3 MEUR (-0.1 MEUR), in Denmark 0.3 MEUR (0.3 MEUR) and in Baltic 0.2 MEUR
(0.3 MEUR).
Operational segment result by reportable segments
Operational segment 1-3/14 1-3/13 2013 last 12m
result, MEUR
Finland 0.9 1.4 6.9 6.3
Norway -0.3 0.9 2.7 1.5
Sweden -0.3 -0.1 -0.2 -0.4
Denmark 0.3 0.3 1.9 1.9
Baltic 0.2 0.3 0.2 0.0
Other -0.6 -0.3 -1.2 -1.5
----------------------------------------------------------
----------------------------------------------------------
Operational segment result 0.1 2.6 10.3 7.8
IFRS3 Amortization -0.5 -0.5 -2.0 -2.0
Operating profit -0.4 2.0 8.3 5.8
----------------------------------------------------------
Operating profit decreased to -0.4 MEUR (2.0 MEUR) and profitability decreased
to -1% (6%). Finland made 7% profit, and suffered somewhat from low resource
utilization especially in the Karttakeskus GIS business. Norway's profitability
was -5% due to low license sales, low resource utilization and the streamlining
actions taken. Profitability was -5% in Sweden and also there the streamlining
actions decreased profitability. Denmark slightly improved its profitability to
9% thanks to less low-margin business in the sales mix than last year. Baltic
made a 4% profit.
According to the IFRS3 requirements, operating profit includes 0.5 MEUR (0.5
MEUR) of amortization on intangible assets related to acquisitions. The other
intangible assets impacting in the IFRS3 amortization totaled 1.2 MEUR at the
end of the reporting period and the amortization will end during year 2014.
Taxes corresponding to the profit of the period have been entered as tax
expense. Net profit for the period was -0.6 MEUR, while it was 1.5 MEUR last
year.
FINANCE AND INVESTMENTS
At the end of the reporting period Affecto's balance sheet totaled 130.8 MEUR
(12/2013: 139.5 MEUR). Equity ratio was 56.0% (12/2013: 53.0%) and net gearing
was 14.1% (12/2013: 7.4%).
The financial loans were 26.5 MEUR (12/2013: 26.5 MEUR) at the end of reporting
period. The company's cash and liquid assets were 17.1 MEUR (12/2013: 21.5
MEUR). The interest-bearing net debt was 9.4 MEUR (12/2013: 5.0 MEUR).
Cash flow from operating activities for the reported period was -4.4 MEUR (-1.9
MEUR) and cash flow from investing activities was -0.1 MEUR (-0.5 MEUR).
Investments in tangible and intangible assets were 0.1 MEUR (0.5 MEUR).
EMPLOYEES
The number of employees was 1068 persons at the end of the reporting period
(1083). 442 employees were based in Finland (421), 120 in Norway (130), 143 in
Sweden (138), 68 in Denmark (68) and 295 in the Baltic countries (326). The
average number of employees during the period was 1078 (1084).
Board member Lars Wahlström has been the interim CEO since 1 January 2014 and
serves in that position during the CEO recruitment process.
REVIEW OF MARKET DEVELOPMENTS
Uncertainty about the general economic development continued to affect
Affecto's business negatively. Customers' decision-making pace was slow and
they are ordering short and small projects, which has decreased the size of the
order backlog especially in Norway. In other countries the backlog is near last
year's level, although in Finland some business areas are lagging. In Sweden
there are also regional differences and the Gothenburg area is the weakest.
Customers in Finland and Norway have remained cautious, which has lowered sales
visibility. Baltic has seen some improvement, but full recovery will take some
time.
Some of our traditionally strong expertise areas are not growing and we are
shifting our offerings and resources to match the changing customer needs. The
streamlining actions we took in Q1 in Norway and Sweden are part of that
adjustment process. Regarding growth areas, we are e.g. increasing focus on the
collaborative solutions. Similarly, we are assessing cloud or hybrid cloud
solutions' role in our area. We are also evaluating the possibilities to
increase our offshore delivery capabilities e.g. through partnerships, to be
able to better serve those customer segments where we have identified demand
for those capabilities.
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 1-3/2014 the net sales in Finland decreased by 2% to 12.6 MEUR (12.8 MEUR).
Operational segment result was 0.9 MEUR (1.4 MEUR) and profitability was 7%.
General mood is still cautious and customers are slow with their investment
decisions, which tend to be toward small projects. Sales visibility is rather
low. There was some resource underutilization, especially on the Karttakeskus
GIS business.
In 1-3/2014 the net sales of Karttakeskus GIS business, reported as part of
Finland, increased by 7% to 3.0 MEUR (2.8 MEUR) and but its profitability
weakened.
In 1-3/2014 the net sales in Norway were 6.3 MEUR (8.5 MEUR) and operational
segment result was -0.3 MEUR (0.9 MEUR). Net sales decreased by 26% to which
also the weakened NOK contributed. Profitability decreased to -5% due to low
license sales, low resource utilization and the streamlining actions taken.
Resources in certain areas were streamlined, which caused an 0.5 MEUR one-off
cost. Customers prefer shorter and smaller projects than earlier, which has
also clearly decreased the order backlog.
In 1-3/2014 the net sales in Sweden were 5.8 MEUR (6.1 MEUR) and operational
segment result -0.3 MEUR (-0.1 MEUR). Net sales decreased by 4%, due to low
license and maintenance sales. Revenue for consultancy work increased.
Operational profitability was slightly positive, but streamlining actions taken
during the quarter caused 0.3 MEUR one-off costs, pushing the profitability to
-5%. Development actions continue and the goal is to achieve normal
profitability, but structural and operational changes for the business will
take some time.
In 1-3/2014 the net sales in Denmark were 3.5 MEUR (3.8 MEUR) and operational
segment result was 0.3 MEUR (0.3 MEUR). Net sales decreased by 10% mainly due
to less low-margin third-party subcontracting work being included in the sales
mix, but profit was at last year's level and profitability increased to 9%.
Market situation in Denmark is rather normal, although competition is tight,
and order backlog is above last year's level.
In 1-3/2014 the net sales in Baltic (Lithuania, Latvia, Estonia, Poland, South
Africa) were 4.1 MEUR (4.3 MEUR). Operational segment result was 0.2 MEUR (0.3
MEUR). Net sales decreased by 3% and profitability decreased to 4%. Especially
the Lithuanian public sector, a key market for us, has slowed its IT
investments. The Estonian market situation is more normal. The situation in
Lithuania is expected to improve slowly during 2014 due to new funding
decisions by the European Union and the possible entrance of Lithuania into
Euro. Several large orders were received in the first quarter, improving the
order backlog.
ANNUAL GENERAL MEETING AND GOVERNANCE
The Annual General Meeting of Affecto Plc, held on 10 April 2014, adopted the
financial statements for 1.1.-31.12.2013 and discharged the members of the
Board of Directors and the CEO from liability. Approximately 33 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
2013.
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.
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 2013, that expired on 10 April 2014.
The complete contents of the new authorizations given by the Annual General
Meeting held on 10 April 2014 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 31 617 new shares have been subscribed with
the 2008C options.
The company has one share series and all shares have similar rights. At the end
of the review period Affecto Plc's share capital consisted of 22 350 221
shares. The company owned directly 64 552 shares and a fully owned subsidiary
Affecto Management Oy owned 823 000 shares. Thus there are 887 552 treasury
shares in total, approx. 4 % of the total amount of the shares.
In 1-3/2014 the highest share price was 4.62 euro, the lowest price 3,59 euro,
the average price 3.97 euro and the closing price 3.68 euro. The trading volume
was 0.8 million shares, corresponding to annualized 15% of the number of shares
at the end of the period. The market value of shares was 79.0 MEUR at the end
of the period excluding the treasury shares.
2008C options have been listed on Nasdaq OMX Helsinki since 2 April 2013 and
their exercise period ends on 31 May 2014.
SHAREHOLDERS
The company had a total of 2 987 owners on 31 March 2014 and the foreign
ownership was 10%. The list of the largest owners can be found in the company's
web site. Information about the ownership structure and option programs is
included as a separate section in the financial statements. The ownership of
the board members, CEO and their controlled corporations totaled approx. 10.4%.
ASSESSMENT OF RISKS AND UNCERTAINTIES
Affecto's order backlog has traditionally been only for a few months, which
decreases the reliability of longer-term forecasts. The changes in the general
economic conditions and the operating environment of customers have direct
impact in Affecto's markets. The uncertain economy may affect Affecto's
customers negatively, and their slower investment decision making, postponing
or cancellation of IT investments may have negative impact on Affecto. Slower
decision making by customers may decrease the predictability of the business
and may decrease the utilisation rate of resources.
Affecto sells third party software licenses as part of its solutions. Typically
the license sales have most impact on the last month of each quarter and
especially in the fourth quarter. This increases the fluctuation in net sales
between quarters and increases the difficulty of accurately forecasting the
quarters. Affecto had license sales of approx. 10 MEUR in 2013.
Affecto's balance sheet includes a material amount of goodwill. Goodwill has
been allocated to cash generating units. Cash generating units, to which
goodwill has been allocated, are tested for impairment both annually and
whenever there is an indication that the unit may be impaired. Potential
impairment losses may have material effect on reported profit and value of
assets. The greatest uncertainty is related to Sweden.
Affecto's success depends also on good customer relationships. Affecto has a
well-diversified customer base. In 2013 the largest customer generated 3% of
Affecto's net sales, while the 10 largest together generated 17%. Although none
of the customers is critically large for the whole group, there are large
customers in various countries who are significant for local business in the
country.
Approximately a half of Affecto's business is in Sweden, Norway and Denmark,
thus the development of the currencies of these countries (SEK, NOK and DKK)
may have impact on Affecto's profitability. The main part of the companies'
income and costs are within the same currency, which decreases the risks.
EVENTS AFTER THE REPORTING PERIOD
The Annual General Meeting, held on 10 April 2014, has been explained in the
interim report.
FUTURE OUTLOOK
Year 2014 net sales and operating profit are estimated to be below last year's
level.
Earlier guidance: Year 2014 net sales and operating profit are 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) 1-3/201 1-3/201 2013 last
4 3 12m
----------------------------------
----------------------------------
Net sales 31 187 34 393 132 896 129
691
Other operating income 0 1 65 64
Changes in inventories of finished 9 437 306 -123
goods and work in progress
Materials and services -5 999 -7 844 -29 952 -28
107
Personnel expenses -20 134 -19 782 -74 031 -74
383
Other operating expenses -4 625 -4 349 -17 803 -18
079
Other depreciation and amortisation -312 -294 -1 230 -1 248
IFRS3 amortisation -549 -523 -1 989 -2 015
Operating profit -424 2 037 8 262 5 801
Financial income and expenses -180 27 -289 -497
Profit before income tax -604 2 064 7 973 5 305
Income tax 53 -527 -2 407 -1 827
Profit for the period -551 1 537 5 566 3 478
Profit for the period
attributable to:
Owners of the parent company -551 1 547 5 493 3 395
Non-controlling interest - -10 73 83
Earnings per share
(EUR per share):
Basic -0.03 0.07 0.26 0.16
Diluted -0.03 0.07 0.26 0.16
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
(1 000 EUR) 1-3/201 1-3/201 2013 last
4 3 12m
----------------------------------
----------------------------------
Profit for the period -551 1 537 5 566 3 478
Other comprehensive income
Items that may be reclassified subsequently
to the statement of income:
Translation difference -43 145 -3 074 -3 262
Total Comprehensive income -594 1 682 2 491 215
for the period
Total Comprehensive income
attributable to:
Owners of the parent company -594 1 692 2 419 133
Non-controlling interest - -10 73 83
CONSOLIDATED BALANCE SHEET
(1 000 EUR) 3/2014 3/2013 12/2013
-------------------------------------------------------------
-------------------------------------------------------------
Non-current assets
Property, plant and equipment 1 777 1 876 1 947
Goodwill 72 117 74 927 72 166
Other intangible assets 1 519 3 616 2 072
Deferred tax assets 1 649 1 524 1 606
Trade and other receivables 2 11 4
77 064 81 954 77 795
Current assets
Inventories 622 754 622
Trade and other receivables 35 039 40 068 38 969
Current income tax receivables 1 063 611 615
Cash and cash equivalents 17 054 17 289 21 469
53 779 58 723 61 675
-------------------------------------------------------------
-------------------------------------------------------------
Total assets 130 844 140 677 139 470
Equity attributable to owners
of the parent Company
Share capital 5 105 5 105 5 105
Reserve of invested non-restricted 47 516 46 759 47 448
equity
Other reserves 784 714 763
Treasury shares -2 165 -2 202 -2 165
Translation differences -2 172 1 091 -2 128
Retained earnings 17 633 17 328 18 184
-------------------------------------------------------------
-------------------------------------------------------------
66 701 68 795 67 207
Non-controlling interest - 301 -
Total equity 66 701 69 097 67 207
Non-current liabilities
Loans and borrowings 22 428 26 395 22 420
Deferred tax liabilities 397 856 505
22 824 27 251 22 924
Current liabilities
Loans and borrowings 4 000 4 000 4 000
Trade and other payables 35 150 38 022 42 788
Current income tax liabilities 1 631 2 036 1 913
Provisions 537 271 638
41 318 44 329 49 339
Total liabilities 64 143 71 580 72 264
-------------------------------------------------------------
-------------------------------------------------------------
Equity and liabilities 130 844 140 677 139 470
SUMMARY CONSOLIDATED CASH FLOW STATEMENT
(1 000 EUR) 1-3/2014 1-3/2013 2013
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash flows from operating activities
Profit for the period -551 1 537 5 566
Adjustments to profit for the period 973 1 343 6 271
423 2 880 11 837
Change in working capital -3 991 -3 695 2 863
Interest and other financial cost paid -104 -133 -566
Interest and other financial income received 22 58 123
Income taxes paid -736 -1 031 -3 343
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net cash from operating activities -4 386 -1 922 10 915
Cash flows from investing activities
Acquisition of tangible and intangible assets -135 -495 -1 566
Proceeds from sale of tangible and - - 1
intangible assets
Net cash used in investing activities -135 -495 -1 564
----------------------------------------------------------------------------
Cash flows from financing activities
Repayments of non-current borrowings - - -4 000
Proceeds from share options exercised 68 117 781
Acquisition of non-controlling interest - - -30
Dividends paid to the owners - - -3 444
of the parent company
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net cash from financing activities 68 117 -6 694
(Decrease)/increase in cash and cash equivalents -4 453 -2 300 2 657
Cash and cash equivalents 21 469 19 767 19 767
at the beginning of the period
Foreign exchange effect on cash 38 -177 -954
Cash and cash equivalents 17 054 17 289 21 469
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-restrict es shares diff. gs interest
ed equity
----------------------------------------------
Equity 5 105 47 448 763 -2 165 -2 128 18 184 - 67 207
at 1
January
2014
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit -551 - -551
Translat -43 -43
ion
differe
nces
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total -43 -551 - -594
compre-
hensive
income
Share-ba 21 21
sed
payment
s
Exercise 68 68
of
share
options
Equity 5 105 47 516 784 -2 165 -2 172 17 633 - 66 701
at 31
March
2014
--------------------------------------------------------------------------------
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-restrict es shares diff. gs interest
ed equity
----------------------------------------------
Equity 5 105 46 643 693 -2 202 946 15 781 311 67 277
at 1
January
2013
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit 1 547 -10 1 537
Translat 145 145
ion
differe
nces
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 145 1 547 -10 1 682
compre-
hensive
income
Share-ba 22 22
sed
payment
s
Exercise 117 117
of
share
options
Equity 5 105 46 759 714 -2 202 1 091 17 328 301 69 097
at 31
March
2013
--------------------------------------------------------------------------------
2. Notes
2.1. Basis of preparation
This interim report has been prepared in accordance with the IFRS recognition
and measurement principles and in accordance with IAS 34, Interim Financial
reporting. The interim report should be read in conjunction with the annual
financial statements for the year ended 31 December 2013. In material respects,
the same accounting policies have been applied as in the 2013 annual
consolidated financial statements. The amendments to and interpretations of
IFRS standards that entered into force on 1 January 2014 had no material impact
on this interim report.
2.2. Segment information
Affecto's reporting segments are based on geographical locations and are
Finland, Norway, Sweden, Denmark and Baltic.
Segment net sales and result
(1 000 EUR) 1-3/2014 1-3/2013 2013 last 12m
--------------------------------------
--------------------------------------
Total net sales
Finland 12 582 12 781 53 175 52 977
Norway 6 274 8 465 29 554 27 363
Sweden 5 827 6 067 23 152 22 912
Denmark 3 458 3 834 15 363 14 988
Baltic 4 135 4 254 16 018 15 898
Other -1 090 -1 008 -4 366 -4 447
Group total 31 187 34 393 132 896 129 691
-----------------------------------------------------------------------
Operational segment result
Finland 861 1 416 6 863 6 307
Norway -293 944 2 718 1 481
Sweden -279 -144 -229 -364
Denmark 294 310 1 884 1 868
Baltic 160 313 193 39
Other -618 -280 -1 177 -1 515
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Total operational segment result 125 2 560 10 251 7 816
IFRS3 amortisation -549 -523 -1 989 -2 015
Operating profit -424 2 037 8 262 5 801
-----------------------------------------------------------------------
Net sales by business lines
(1 000 EUR) 1-3/2014 1-3/2013 2013 last 12m
--------------------------------------
--------------------------------------
Information Management Solutions 29 055 32 164 123 608 120 497
Karttakeskus GIS business 2 965 2 769 12 239 12 435
Other -832 -541 -2 950 -3 242
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Group total 31 187 34 393 132 896 129 691
2.3. Changes in intangible and tangible assets
(1 000 EUR) 1-3/2014 1-3/2013 1-12/2013
------------------------------
------------------------------
Carrying amount at the beginning of period 76 185 80 460 80 460
Additions 135 495 1 566
Disposals - - -1
Depreciation and amortization for the period -861 -817 - 3 219
Exchange rate differences -46 282 -2 621
Carrying amount at the end of period 75 413 80 419 76 185
---------------------------------------------------------------------------
2.4. Share capital, reserve of invested non-restricted equity and treasury
shares
(1 000 EUR) Number of shares Share Reserve of invested Treasury
outstanding capital non-restricted equity shares
---------------------------------------------------------------- ----------------------------------------------------------------
1.1.2013 20 641 641 5 105 46 643 -2 202
Exercise of 62 986 - 117 -
share options
31.3.2013 20 704 627 5 105 46 759 -2 202
1.1.2014 21 431 052 5 105 47 448 -2 165
Exercise of 31 617 - 66 -
share options
Payment for - - 2 -
share options
31.3.2014 21 462 669 5 105 47 516 -2 165
At the end of reporting period Affecto Plc owned 64 552 treasury shares. In
addition to that Affecto Management Oy, a fully owned subsidiary, owned 823 000
shares in Affecto Plc. In total these 887 552 shares correspond to 4.0% of the
total amount of the shares. The amount of registered shares was 22 350 221
shares.
2.5. Interest-bearing liabilities
(1 000 EUR) 31.3.2014 31.12.2013
Interest-bearing non-current liabilities
Loans from financial institutions, 22 428 22 420
non-current portion
Loans from financial institutions, 4 000 4 000
current portion
---------------------------------------------------------------
---------------------------------------------------------------
26 428 26 420
Affecto's loan facility agreement includes financial covenants, breach of which
might lead to an increase in cost of debt or cancellation of the facility
agreement. The covenants are based on total net debt to earnings before
interest, taxes, depreciation and amortization and total net debt to total
equity. The covenants will be measured quarterly, and these terms and
conditions of covenants were met at the end of the reporting period.
2.6. Contingencies and commitments
The future aggregate minimum lease payments under non-cancelable operating
leases:
(1 000 EUR) 31.3.2014 31.12.2013
Not later than one (1) year 3 565 3 675
Later than one (1) year, 4 637 3 719
but not later than five (5) years
Later than five (5) years - -
Total 8 202 7 394
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Guarantees given:
(1 000 EUR) 31.3.2014 31.12.2013
Liabilities secured by a mortgage
Financial loans 26 500 26 500
The above-mentioned liabilities are secured by bearer bonds with a nominal
value of 52.5 million euro. The bonds are held by Nordea Pankki Suomi Oyj and
secured by a mortgage on company assets of the group companies. In addition,
the shares in Affecto Finland Oy and Affecto Norway AS have been pledged to
secure the financial liabilities above.
Other securities given on own behalf:
(1 000 EUR) 31.3.2014 31.12.2013
Pledges 36 36
Other guarantees 3 105 2 836
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) 1-3/2014 1-3/2013 1-12/2013
Salaries and other short-term employee benefits 645 516 2 017
Post-employment benefits 77 79 288
Termination benefits - -1 85
Share-based payments 2 2 6
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Total 724 596 2 395
Loans to related party:
(1 000 EUR) 31.3.2014 31.3.2013 31.12.2013
Loans to key management of the group - 1 636 -
Purchases from related party:
(1 000 EUR) 1-3/20 1-3/20 1-12/2
14 13 013
Purchases from the entity that are controlled by key - 5 5
management personnel of the group
3. Key figures
1-3/2014 1-3/2013 2013 last 12m
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Net sales, 1 000 eur 31 187 34 393 132 896 129 691
EBITDA, 1 000 eur 437 2 854 11 481 9 064
Operational segment result, 125 2 560 10 251 7 816
1 000 eur
Operating result, 1 000 eur -424 2 037 8 262 5 801
Result before taxes, 1 000 eur -604 2 064 7 973 5 305
Profit attributable to the owners -551 1 547 5 493 3 395
of the parent company, 1 000 eur
EBITDA, % 1.4 % 8.3 % 8.6 % 7.0 %
Operational segment result, % 0.4 % 7.4 % 7.7 % 6.0 %
Operating result, % -1.4 % 5.9 % 6.2 % 4.5 %
Result before taxes, % -1.9 % 6.0 % 6.0 % 4.1 %
Net income for equity holders -1.8 % 4.5 % 4.1 % 2.6 %
of the parent company, %
Equity ratio, % 56.0 % 54.1 % 53.0 %
Net gearing, % 14.1 % 19.0 % 7.4 %
Interest-bearing net debt, 9 373 13 106 4 950
1 000 eur
Gross investment in non-current 135 495 1 566
assets (excl. acquisitions),
1 000 eur
Gross investments, % of net sales 0.4 % 1.4 % 1.2 %
Order backlog, 1 000 eur 47 523 50 512 48 682
Average number of employees 1 078 1 084 1 081
Earnings per share, eur -0.03 0.07 0.26 0.16
Earnings per share (diluted), -0.03 0.07 0.26 0.16
eur
Equity per share, eur 3.11 3.32 3.14
Average number of shares, 21 437 20 644 20 906 21 101
1 000 shares
Number of shares at the end of 21 463 20 705 21 431 21 463
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
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Additional information:
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
CFO Satu Kankare, +358 205 777 202
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